Sign In Newsletters Contact Us
BusinessCompany EarningsNewsTop StoriesTruckingTruckload CarriersTruckload Freight

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

CEO Leathers cites factors including rising insurance costs, mentions tariff ‘uncertainty’

John Kingston
·
First look: Werner had a net loss for the first quarter. (Photo: Jim Allen\FreightWaves)

Key Takeaways:

  • Werner Enterprises reported a net loss of $10.2 million in Q1 2024, significantly lower than the $6.2 million profit in Q1 2023 and below analysts' expectations.
  • The loss was attributed to increased insurance costs, severe weather, a smaller fleet size, and decreased customer activity due to tariff uncertainty.
  • Despite the loss, Werner maintained a relatively stable outlook, slightly adjusting its revenue growth forecast and highlighting positive trends in its Dedicated and Logistics segments.
  • The company's balance sheet remains strong, with increased cash on hand compared to the previous quarter.
Key takeaways sponsored by SONAR

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.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.