First look: Net loss at Werner upends expectations of positive EPS

Werner Enterprises posted an unexpected loss in Q1.

• Werner posted a net loss of $10.2 million for the quarter. A year ago, it made $6.2 million in the first quarter. Net income in the fourth quarter was $11.6 million. It also posted an operating loss of $5.8 million, compared to an operating income a year earlier of $15.6 million.

• In comments that accompanied the release of earnings, CEO Derek Leathers said the results were “below our expectations due to elevated insurance costs, extreme weather, a smaller fleet and changes in customer activity stemming from tariff-induced uncertainty.” Insurance costs rose to $43.7 million from $36.3 million a year ago. 

• The loss of 12 cents per share was unexpected. According to SeekingAlpha, Werner (NASDAQ: WERN) was expected to earn 24 cents per share in the quarter. Total revenue of $712.1 million was off by about $27 million, according to SeekingAlpha.

• The adjusted operating margin net of fuel for the Truckload Transportation Services Segment was 99.6%, barely above breakeven.

• Despite the poor quarter, Werner made only minimal changes to its forecast. Growth in one-way revenue per ton mile is now forecast at 0% to 3% for the year. In the guidance released last quarter, that figure was 1% to 4%.

• Werner’s costs were $717.95 million, down from $753.5 million a year ago. Salaries, wages and benefits fell to $243.2 million from $265.4 million. Purchased transportation rose slightly to $206.1 million.

• The balance sheet is solid. Cash on hand at the end of the quarter was just under $52 million, up from $40.6 million at the end of 2024. 

• In his statement, Leathers tried to accentuate the positive. He said Werner has been “seeing strength” in its Dedicated segment, with a “streak of wins” in new contracts. He highlighted One-Way Truckload revenue per total mile as up “modestly” for the third straight quarter. The Logistics segment had “improved income and margin with ongoing focus on cost management.”

• Leathers also noted increased deadhead miles in One-Way Truckload. That figure rose to 16% from 14.9% a year ago, a figure that would be considered high in the truckload industry. However, the 16% is a slight improvement from the 16.11% in the fourth quarter.