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Werner's (WERN) Q2 Earnings Meet Estimates, Stock Down 2.3%
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Werner Enterprises Inc. (WERN - Free Report) reported second-quarter 2021 earnings (excluding 20 cents from non-recurring items) of 86 cents per share, in line with the Zacks Consensus Estimate. The bottom line surged 38.7% year over year. However, bottom-line results seem to have displeased investors. The stock lost 2.3% of its value since its earnings release on Jul 29.
Total revenues of $649.8 million outperformed the Zacks Consensus Estimate of $643 million. The top line moved up 14.2% on a year-over-year basis. The uptick can be primarily attributed to higher revenues in the Truckload Transportation Services and Logistics segments.
Operating income (adjusted) came in at $79.1 million in the reported quarter, up 37% year over year. Adjusted operating margin increased 210 basis points (bps) to 12.2%. Operating expenses surged 11% to $5723 million.
Werner Enterprises, Inc. Price, Consensus and EPS Surprise
Revenues in the Truckload Transportation Services (“TTS”) segment increased 10% on a year-over-year basis to $491.2 million. The upside can be attributed to 68% rise in fuel surcharge revenues. Adjusted operating income surged 33% to $74.4 million. Additionally, adjusted operating margin expanded 250 bps to 15.1%. Adjusted operating ratio (operating expenses, as a percentage of revenues) expanded 250 bps to 84.9%. Notably, lower the value of the metric, the better.
Werner Logistics segment’s revenues totaled $141.7 million, up 29% year over year owing to 10% rise in truckload logistics volume and 37% rise in revenues per shipment. The segment reported operating income of $3.93 million, up 25% from the year-ago quarter’s levels. Further, operating margin was 2.8%, flat year over year. The Other segment accounted for the rest of the top line.
Liquidity
As of Jun 30, 2021, Werner, carrying a Zacks Rank #2 (Buy), had cash and cash equivalents of $192.1 million compared with $29.33 million at 2020 end. Long-term debt (net of current portion) totaled $300 million at the end of the second quarter compared with $175 million recorded at the end of 2020. You can seethe complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Outlook
Werner now anticipates TTS truck growth of 1-4% year over year in 2021 (previous expectation: 1-3% growth year over year). It includes the addition of 500 trucks in its fleet, owing to the acquisition of 80% equity ownership interest in ECM Transport Group, which was finalized on Jul 1, 2021.
Net capital expenditures are estimated in the band of $275-$300 million (unchanged from the previous guidance).
Effective income tax rate is still expected in the range of 24.5-25.5%.
Truck age and Trailer age is expected to be at two years and low-to-mid “four” years, respectively.
Under the TTS guidance, One-Way Truckload revenues per total mile are now expected to increase in the 16-19% band for the second half of 2021 from second-half of 2020 levels (earlier expectation was for an increase in the 13-16% band).
The company expects gains on sales of equipment in the range of $9-$13 million in the third quarter of 2021.
Sectorial Snapshot
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported second-quarter 2021 results.
Delta, carrying a Zacks Rank #3 (Hold), incurred a loss (excluding $2.09 from non-recurring items) of $1.07 per share. The figure was narrower than the Zacks Consensus Estimate of a loss of $1.41. Revenues of $7,126 million were substantially higher than the year-ago quarter’s levels, buoyed by the recent uptick in air-travel demand. The metric also topped the Zacks Consensus Estimate of $6,340.9 million.
Kansas City Southern, carrying a Zacks Rank of 4(Sell), reported second-quarter 2021 earnings (excluding $6.23 from non-recurring items) of $2.06 per share. The figure missed the Zacks Consensus Estimate of $2.16. Quarterly revenues of $749.5 million surpassed the Zacks Consensus Estimate of $733.1 million and increased 36.8% year over year. The upside was driven by 31% rise in overall carload volumes.
J.B. Hunt, a Zacks #3-Ranked player, reported better-than-expected second-quarter 2021 results. Quarterly earnings of $1.61 per share surpassed the Zacks Consensus Estimate of $1.55. Total operating revenues of $2908.4 million outperformed the Zacks Consensus Estimate of $2722 million and rallied 35.5% year over year.
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Werner's (WERN) Q2 Earnings Meet Estimates, Stock Down 2.3%
Werner Enterprises Inc. (WERN - Free Report) reported second-quarter 2021 earnings (excluding 20 cents from non-recurring items) of 86 cents per share, in line with the Zacks Consensus Estimate. The bottom line surged 38.7% year over year. However, bottom-line results seem to have displeased investors. The stock lost 2.3% of its value since its earnings release on Jul 29.
Total revenues of $649.8 million outperformed the Zacks Consensus Estimate of $643 million. The top line moved up 14.2% on a year-over-year basis. The uptick can be primarily attributed to higher revenues in the Truckload Transportation Services and Logistics segments.
Operating income (adjusted) came in at $79.1 million in the reported quarter, up 37% year over year. Adjusted operating margin increased 210 basis points (bps) to 12.2%. Operating expenses surged 11% to $5723 million.
Werner Enterprises, Inc. Price, Consensus and EPS Surprise
Werner Enterprises, Inc. price-consensus-eps-surprise-chart | Werner Enterprises, Inc. Quote
Segmental Results
Revenues in the Truckload Transportation Services (“TTS”) segment increased 10% on a year-over-year basis to $491.2 million. The upside can be attributed to 68% rise in fuel surcharge revenues. Adjusted operating income surged 33% to $74.4 million. Additionally, adjusted operating margin expanded 250 bps to 15.1%. Adjusted operating ratio (operating expenses, as a percentage of revenues) expanded 250 bps to 84.9%. Notably, lower the value of the metric, the better.
Werner Logistics segment’s revenues totaled $141.7 million, up 29% year over year owing to 10% rise in truckload logistics volume and 37% rise in revenues per shipment. The segment reported operating income of $3.93 million, up 25% from the year-ago quarter’s levels. Further, operating margin was 2.8%, flat year over year. The Other segment accounted for the rest of the top line.
Liquidity
As of Jun 30, 2021, Werner, carrying a Zacks Rank #2 (Buy), had cash and cash equivalents of $192.1 million compared with $29.33 million at 2020 end. Long-term debt (net of current portion) totaled $300 million at the end of the second quarter compared with $175 million recorded at the end of 2020. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Outlook
Werner now anticipates TTS truck growth of 1-4% year over year in 2021 (previous expectation: 1-3% growth year over year). It includes the addition of 500 trucks in its fleet, owing to the acquisition of 80% equity ownership interest in ECM Transport Group, which was finalized on Jul 1, 2021.
Net capital expenditures are estimated in the band of $275-$300 million (unchanged from the previous guidance).
Effective income tax rate is still expected in the range of 24.5-25.5%.
Truck age and Trailer age is expected to be at two years and low-to-mid “four” years, respectively.
Under the TTS guidance, One-Way Truckload revenues per total mile are now expected to increase in the 16-19% band for the second half of 2021 from second-half of 2020 levels (earlier expectation was for an increase in the 13-16% band).
The company expects gains on sales of equipment in the range of $9-$13 million in the third quarter of 2021.
Sectorial Snapshot
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported second-quarter 2021 results.
Delta, carrying a Zacks Rank #3 (Hold), incurred a loss (excluding $2.09 from non-recurring items) of $1.07 per share. The figure was narrower than the Zacks Consensus Estimate of a loss of $1.41. Revenues of $7,126 million were substantially higher than the year-ago quarter’s levels, buoyed by the recent uptick in air-travel demand. The metric also topped the Zacks Consensus Estimate of $6,340.9 million.
Kansas City Southern, carrying a Zacks Rank of 4(Sell), reported second-quarter 2021 earnings (excluding $6.23 from non-recurring items) of $2.06 per share. The figure missed the Zacks Consensus Estimate of $2.16. Quarterly revenues of $749.5 million surpassed the Zacks Consensus Estimate of $733.1 million and increased 36.8% year over year. The upside was driven by 31% rise in overall carload volumes.
J.B. Hunt, a Zacks #3-Ranked player, reported better-than-expected second-quarter 2021 results. Quarterly earnings of $1.61 per share surpassed the Zacks Consensus Estimate of $1.55. Total operating revenues of $2908.4 million outperformed the Zacks Consensus Estimate of $2722 million and rallied 35.5% year over year.