Werner Enterprises, Inc. (Nasdaq: WERN), a leading transportation and logistics company, today released its financial results for the third quarter ending September 30, 2024.
“Despite ongoing freight market challenges, we observed a tightening late in the quarter due to disruptions from hurricane-related supply chain impacts,” said Derek Leathers, Werner’s Chairman and CEO. “Our One-Way Truckload revenue per mile rose year-over-year for the first time in seven quarters, and fleet productivity improved for the sixth consecutive quarter. Dedicated fleet revenue and truck count also increased sequentially. However, pricing and margin pressures persist in Logistics, and resale equipment values remain low. We remain committed to improving operational efficiencies, driving cost savings, and advancing our technology roadmap to create long-term value for shareholders,” he added.
Financial Highlights
- Total Revenue: $745.7 million, down $72.0 million year-over-year. Truckload Transportation Services (TTS) saw a revenue drop of $49.4 million (9%), while Logistics revenues fell $23.5 million (10%), partly due to a $20 million decline in fuel surcharge revenues. Excluding fuel surcharges, consolidated revenues decreased $52.1 million, or 7%.
- Operating Income: $17.6 million, down 54% year-over-year. Adjusted operating income (non-GAAP) was $21.6 million, down 48%.
- Net Income: Werner reported $6.6 million in net income, down 72%, with adjusted net income at $9.2 million, down 65%. Diluted EPS fell to $0.11, a 72% decrease, with adjusted diluted EPS down 64% to $0.15.
Truckload Transportation Services (TTS) Performance
- Revenue: $522.8 million, down $49.4 million year-over-year. Revenue per truck per week grew by 3.5%.
- Operating Income: Decreased by $17.2 million, primarily due to lower property and equipment resale values and a smaller fleet size. Adjusted operating margin decreased 270 basis points to 4.1%.
- Fleet Size: Average trucks in service totaled 7,414, a 9.9% decrease year-over-year.
- Dedicated Fleet: Increased sequentially, with revenue per truck up by 1.7%. Dedicated fleet trucks represented 66% of the TTS segment by quarter-end.
- One-Way Truckload: Revenue per mile grew by 0.3% despite a 12.3% decrease in average trucks. Total miles per truck per week increased by 6.6%, marking the sixth consecutive quarter of improvement.
Werner Logistics Segment Performance
- Revenue: $206.8 million, down 10% year-over-year.
- Operating Income: Posted a $0.3 million operating loss, compared to $2.0 million in operating income a year earlier. Adjusted operating income was $0.8 million.
- Operating Margin: Adjusted operating margin fell to 0.4% amid increased competition and compressed gross margins.
- Truckload Logistics: Revenues decreased 12% due to lower shipment volume, despite an 18% increase in Power Only volumes.
- Intermodal: Revenue rose 7%, benefiting from higher shipment volumes.
- Final Mile: Revenue declined by 17%, primarily due to reduced demand for furniture and appliances and the timing of new customer implementations.
Werner Enterprises is focused on enhancing revenue quality, lowering service costs, and positioning the company for future growth amid an evolving industry landscape.