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Werner's (WERN) Q3 Earnings Miss Estimates, Increase Y/Y
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Werner Enterprises Inc. (WERN - Free Report) reported third-quarter 2021 earnings (excluding 15 cents from non-recurring items) of 79 cents per share, missing the Zacks Consensus Estimate of 95 cents. The bottom line surged 14.5% on a year-over-year basis.
Total revenues of $702.9 million also missed the Zacks Consensus Estimate of $705 million. The top line increased 19.1% 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 $73.9 million in the reported quarter, up 15% year over year. Adjusted operating margin fell 40 basis points (bps) to 10.5%. Operating expenses rose 19.6% to $631.6 million.
Werner Enterprises, Inc. Price, Consensus and EPS Surprise
Revenues in the Truckload Transportation Services (“TTS”) segment increased 15% on a year-over-year basis to $527.7 million. The upside can be attributed to a 65% rise in fuel surcharge revenues. Adjusted operating income was flat at $65 million. Adjusted operating margin dropped 180 bps to 12.4%. Adjusted operating ratio (operating expenses, as a percentage of revenues) deteriorated 180 bps to 87.6%. Lower the value of the metric, the better.
The Logistics segment’s revenues totaled $158 million, up 35% year over year. The upside can be attributed to a 63% rise in truckload logistics revenues (arising from a 33% rally in revenues per shipment and a 23% increase in shipments). The segment reported operating income of $7.65 million. Operating margin was 4.8%. The Other segment accounted for the rest of the top line.
Liquidity
As of Sep 30, 2021, Werner, carrying a Zacks Rank #3 (Hold), had cash and cash equivalents of $45.43 million compared with $29.33 million at 2020 end. Long-term debt (net of current portion) totaled $343.7 million at the end of the third quarter compared with $175 million 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 3-5% year over year in 2021 (previous expectation: 1-4% growth year over year).
Net capital expenditures are estimated in the band of $250-$275 million (previous guidance: $275-$300 million).
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 2.2 years and 4.4 years (previous outlook: two years and low-to-mid “four” years), respectively.
Under the TTS guidance, fourth-quarter One-Way Truckload revenues per total mile are now expected to increase 17-19% from fourth-quarter 2020 levels.
The company expects gains on sales of equipment in the range of $10-$12 million for the fourth quarter of 2021.
Dedicated RPTPW (Net of fuel surcharge revenues) growth for the fourth quarter is expected to be 1-2%.
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 third-quarter 2021 results.
Delta reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million beat the Zacks Consensus Estimate of $8,370.6 million.
J.B. Hunt reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million.
Kansas City Southern reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million surpassed the Zacks Consensus Estimate of $725.9 million.
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Werner's (WERN) Q3 Earnings Miss Estimates, Increase Y/Y
Werner Enterprises Inc. (WERN - Free Report) reported third-quarter 2021 earnings (excluding 15 cents from non-recurring items) of 79 cents per share, missing the Zacks Consensus Estimate of 95 cents. The bottom line surged 14.5% on a year-over-year basis.
Total revenues of $702.9 million also missed the Zacks Consensus Estimate of $705 million. The top line increased 19.1% 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 $73.9 million in the reported quarter, up 15% year over year. Adjusted operating margin fell 40 basis points (bps) to 10.5%. Operating expenses rose 19.6% to $631.6 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 15% on a year-over-year basis to $527.7 million. The upside can be attributed to a 65% rise in fuel surcharge revenues. Adjusted operating income was flat at $65 million. Adjusted operating margin dropped 180 bps to 12.4%. Adjusted operating ratio (operating expenses, as a percentage of revenues) deteriorated 180 bps to 87.6%. Lower the value of the metric, the better.
The Logistics segment’s revenues totaled $158 million, up 35% year over year. The upside can be attributed to a 63% rise in truckload logistics revenues (arising from a 33% rally in revenues per shipment and a 23% increase in shipments). The segment reported operating income of $7.65 million. Operating margin was 4.8%. The Other segment accounted for the rest of the top line.
Liquidity
As of Sep 30, 2021, Werner, carrying a Zacks Rank #3 (Hold), had cash and cash equivalents of $45.43 million compared with $29.33 million at 2020 end. Long-term debt (net of current portion) totaled $343.7 million at the end of the third quarter compared with $175 million 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 3-5% year over year in 2021 (previous expectation: 1-4% growth year over year).
Net capital expenditures are estimated in the band of $250-$275 million (previous guidance: $275-$300 million).
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 2.2 years and 4.4 years (previous outlook: two years and low-to-mid “four” years), respectively.
Under the TTS guidance, fourth-quarter One-Way Truckload revenues per total mile are now expected to increase 17-19% from fourth-quarter 2020 levels.
The company expects gains on sales of equipment in the range of $10-$12 million for the fourth quarter of 2021.
Dedicated RPTPW (Net of fuel surcharge revenues) growth for the fourth quarter is expected to be 1-2%.
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 third-quarter 2021 results.
Delta reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million beat the Zacks Consensus Estimate of $8,370.6 million.
J.B. Hunt reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million.
Kansas City Southern reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million surpassed the Zacks Consensus Estimate of $725.9 million.