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Werner beats Q4 estimates, points to organic growth opportunities

Carrier expects to grow top line by 10% on average over next 5 years

Fourth-quarter adjusted EPS of $1.13 bests consensus estimate of 97 cents (Photo: Jim Allen/FreightWaves)

Werner Enterprises said on a call with analysts Thursday it plans to grow revenue by 10% on average over the next five years. The bulk of that is expected to be achieved through organic growth initiatives versus acquisitions.  

Werner (NASDAQ: WERN) reported adjusted earnings per share of $1.13 Thursday after the market closed. The result was ahead of the consensus estimate of 97 cents and the year-ago result of 89 cents.

The number included 24 cents per share in gains from equipment sales, a 20-cent-per-share increase compared to the fourth quarter of 2020. Werner sold one-third fewer trucks and only half of the trailers it sold in the year-ago period. However, gains soared as production constraints at the manufacturers have driven used equipment prices materially higher.

The EPS result excluded 5 cents per share in gains from equity investments in autonomous technology companies.

The TL unit reported revenue of $563 million, 19% higher year-over-year (13% higher excluding fuel surcharge revenue). One-way revenue increased 12% as average trucks in service moved 6% higher, with revenue per truck per week up by a similar percentage. Revenue per total mile increased 19% year-over-year in the quarter.

Dedicated revenue increased 13% year-over-year, the result of a 7% increase in truck count and a 5% increase in revenue per truck per week.


The TL division posted an 81.8% adjusted operating ratio, which was flat year-over-year. The incremental gains on sale compared to the fourth quarter of 2020 provided a 350-basis-point tailwind to margin in the quarter.

The logistics segment recorded revenue of $185 million, 42% higher year-over-year. Revenue tied to TL was 58% higher, with loads increasing 23% and revenue per load moving 29% higher.

Table: Werner’s key performance indicators

Management said the 10% growth target over the next five years can be achieved alongside improving margins. The bulk of the growth will come from organic truck additions as well as higher pricing. The goal is to operate at least at the midpoint of the recently raised longer-term TL margin range of 12% to 17% while achieving the new revenue target. If achieved, operating income in the TL segment would grow roughly 50% from the $289 million recorded in 2021.

In 2022, the company expects to grow its truck fleet between 2% and 5%. Revenue per total mile in the one-way segment is expected to increase between 16% and 19% year-over-year in the first half of 2022, and revenue per truck per week in the dedicated unit is expected to increase between 3% and 5% for the full year.

Werner generated $333 million in cash flow from operations during 2021, down 25% year-over-year. Free cash flow was $140 million compared to $180 million in 2020. Net capital expenditures were limited at $193 million due to production constraints at the truck and trailer manufacturers. The company’s 2022 capex budget is $275 million to $325 million.

Werner made two acquisitions in the year — the $142 million acquisition of regional carrier ECM Transport Group and the $64 million acquisition of final-mile carrier Nehds Logistics — which were funded with cash and debt.

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes Werner (No. 10) and ECM Transport (No. 185).

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Watch: Carrier Update – February 3 2022

Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.