Core Viewpoint - Werner Enterprises (WERN) shows potential as a strong investment opportunity due to a significant revision in the company's earnings estimates, indicating an improving earnings outlook [1][10]. Earnings Estimate Revisions - Analysts are increasingly optimistic about Werner's earnings prospects, leading to higher estimates that are expected to positively impact the stock price [2]. - For the current quarter, the earnings estimate is projected at $0.06 per share, reflecting a decrease of 64.71% from the previous year, but the Zacks Consensus Estimate has increased by 11.86% over the last 30 days due to one upward revision [6]. - For the full year, the expected earnings are $0.42 per share, which is a decline of 20.75% from the prior year, yet the consensus estimate has risen by 5.34% following one upward revision [7][8]. Zacks Rank and Performance - The positive revisions in earnings estimates have led to Werner achieving a Zacks Rank 2 (Buy), indicating strong potential for outperformance compared to the S&P 500 [9]. - Historically, Zacks 1 (Strong Buy) and 2 (Buy) ranked stocks have significantly outperformed the S&P 500, with Zacks 1 stocks averaging an annual return of +25% since 2008 [3][9]. Recent Stock Performance - Over the past four weeks, Werner shares have increased by 5.4%, suggesting that investors are responding favorably to the company's earnings growth prospects [10].

Core Insights - Werner Enterprises (WERN) is currently facing multiple challenges, making it an unattractive investment option [1] Earnings Estimates - The Zacks Consensus Estimate for WERN's second-quarter 2025 earnings has decreased by 78.5% over the past 60 days, while the full-year 2025 earnings estimate has been revised down by 65.8% in the same period, indicating a lack of confidence from brokers [2][5] - For second-quarter 2025, WERN's earnings are expected to decline by 64.71% year over year, and for the full year, a decrease of 24.53% year over year is anticipated [7] Price Performance - WERN's stock has declined by 23.5% year-to-date, underperforming the transportation-truck industry's decline of 16.1% [5][8] - The company's earnings surprise history is poor, having missed earnings estimates in the past four quarters with an average miss of 79.95% [6][5] Revenue Trends - In the first quarter of 2025, WERN reported revenues of $712.11 million, falling short of the Zacks Consensus Estimate of $746.8 million, and representing a 7% year-over-year decline [8] Industry Challenges - The trucking industry, including WERN, is facing a persistent driver shortage, complicating recruitment as older drivers retire and younger generations are less attracted to low-paying jobs [9] - The industry has a Zacks Industry Rank of 234 out of 250, placing it in the bottom 4% of Zacks industries, which negatively impacts stock performance [10]

Investment Rating - The report does not explicitly state an investment rating for the transportation and logistics industry Core Insights - The report highlights a positive trend in U.S. imports, with a 6.1% week-over-week increase as of May 18, outperforming seasonal expectations by 980 basis points and showing a 2.8% year-over-year increase [2] - Spot rates for truckload transportation have surged, with dry van rates increasing by 6.1% week-over-week, outperforming historical averages [3] - There are concerns regarding potential freight demand impacts due to tariffs, with expectations of a flat outlook for dry van spot rates in 2026 [6] Summary by Sections Import & Congestion Monitor - Container bookings from China to the U.S. are at five-year lows, down 27% compared to 2023, indicating subdued future demand [2] - The report notes a recovery in container imports at the Port of LA/LB, which increased by 24% week-over-week [2] Truckload and Rail Data - Spot rates for dry van, reefers, and flatbed have all increased week-over-week, with dry van rates now 4% higher year-over-year [3] - The dry van load-to-truck ratio increased by 57% week-over-week, indicating a tightening market [6] - Rail management teams express skepticism about the feasibility of transcontinental mergers due to regulatory barriers [7] Airfreight & Surface Transportation - Airfreight rates have been monitored closely due to tariff implications, with significant declines observed in key freight lanes, particularly the China-U.S. lane, which fell by 6% week-over-week [10] - The overall airfreight market is experiencing broad-based weakness, with all major lanes underperforming seasonal expectations year-to-date [10] Rail Performance - The report card for railroads indicates varying performance levels, with some railroads rated as excellent while others are fair or poor [9] - Regulatory challenges are highlighted as a significant barrier to potential mergers in the rail industry, with environmental impact studies being particularly burdensome [7]

Summary of Werner Enterprises Conference Call Company Overview - **Company**: Werner Enterprises - **Industry**: Transportation and Logistics - **Key Figures**: - Asset pool: Approximately 7,500 trucks and nearly 30,000 trailers - Consolidated revenue: Over $3 billion - Employees: Nearly 13,000 associates [4][4] Core Business Segments - **Truckload Transportation Services (TTS)**: - Annualized revenue: Over $2 billion - Two-thirds dedicated services, focusing on reliability for large enterprise customers - One-way services include expedited lanes and cross-border operations [5][5] - **Logistics**: - Revenue: Over $900 million - 75% from truckload brokerage, 25% from intermodal and final mile services [5][5] Recent Challenges and Strategies - **Market Conditions**: - Experienced a long downturn with macroeconomic challenges - Focused on long-term strategy, customer trust, safety, service solutions, and technology investments [6][6][7][7] - **Tariff Impact**: - Approximately 10% of consolidated revenues are exposed to Mexico - West Coast operations also affected by tariff-related disruptions, but no permanent changes in supply chains observed [8][10][11] - **Inventory Levels**: - Customers' inventories are healthy, with some elevated levels noted - Shippers are managing inventory effectively, indicating stability in freight flow [12][13][17] Pricing and Revenue Insights - **Contract Rates**: - Low to mid-single-digit increases in contract rates observed during bid season - One-way trucking rate per total mile increased by 0.3% year-over-year in Q1 [18][19][20] - **Spot Market Comparison**: - Spot rates are generally lower than contract rates, with a difference of 20 to 30 cents [22][22] - **Revenue per Truck**: - Revenue per truck per week in dedicated services has been increasing consistently over the years [54][54] Operational Metrics - **Operating Ratio**: - Reported at 99.6% in Q1, with expectations for improvement in Q2 due to increased dedicated volume and cost savings initiatives [57][59] - **Utilization Rates**: - Utilization fell by 3.5% in Q1, attributed to weather disruptions and tariff impacts, but improvements are expected moving forward [69][70] Future Outlook - **Growth Strategy**: - Targeting 1% to 5% growth in fleet size, with a focus on dedicated services - Positive momentum in customer conversations and strategic long-term focus noted [36][38][41] - **Cost Management**: - Aiming for $40 million in cost savings for the year, with operational expenses down 11% year-over-year in logistics [74][74] - **Market Balance**: - Evidence of capacity reduction in the trucking market, with a 30% year-over-year increase in bankruptcies noted in March [68][68] Conclusion - **Overall Sentiment**: - Mixed results but a positive outlook with intentional actions taken to improve business performance and readiness for macroeconomic recovery [77][77][78][78]

Financial Performance - Operating revenues for Q1 2025 were $712,114, a decrease of 7.4% from $769,080 in Q1 2024[12] - The company reported a net loss of $10,098 in Q1 2025, compared to a net income of $6,312 in Q1 2024, marking a significant decline[12] - Earnings per share (EPS) for Q1 2025 were $(0.16), down from $0.10 in Q1 2024[12] - Total revenues for the three months ended March 31, 2025, were $712.1 million, a decrease of 7.4% from $769.1 million in the same period of 2024[28] - The net loss attributable to Werner for the three months ended March 31, 2025, was $10.1 million, compared to a net income of $6.3 million in the same period of 2024[28] - For the three months ended March 31, 2025, the company reported a net loss of $10.1 million, resulting in a basic and diluted loss per share of $0.16[79] - The reportable segment operating loss for Truckload Transportation Services was $916,000, and for Werner Logistics, it was $475,000, leading to a consolidated operating loss of $5.8 million[87] Operating Expenses - Total operating expenses decreased to $717,946 in Q1 2025 from $753,492 in Q1 2024, reflecting a reduction of 4.7%[12] - Operating expenses for the consolidated entity totaled $717,946,000 in Q1 2025, down 4.7% from $753,492,000 in Q1 2024[96] - Fuel expenses for the consolidated entity decreased by 18.7% to $63,092,000 in Q1 2025 from $77,622,000 in Q1 2024[96] - Salaries, wages, and benefits decreased by $22.2 million or 8.4% in Q1 2025 compared to Q1 2024, due to fewer company tractor miles and lower non-driver pay[10][11] - Insurance and claims expenses increased by 20.4% to $43.6 million in Q1 2025 compared to Q1 2024, driven by higher expenses for large dollar liability claims[8][9] - Other operating expenses increased by $0.7 million in Q1 2025 compared to Q1 2024, with gains on sales of property and equipment decreasing from $3.6 million to $2.8 million[125] Cash Flow and Liquidity - Cash and cash equivalents increased to $51,951 at the end of Q1 2025, up from $40,752 at the end of Q4 2024[17] - Net cash provided by operating activities was $29,370 in Q1 2025, a decrease of 66.8% from $88,585 in Q1 2024[19] - Cash flow from operations was $29.4 million in Q1 2025, a decrease of 66.8% or $59.2 million compared to the same period in 2024[132] - As of March 31, 2025, the company had total available borrowing capacity of $725.3 million[66] Assets and Liabilities - Total assets decreased to $2,986,649 as of March 31, 2025, from $3,052,237 at the end of 2024, a decline of 2.1%[17] - The company repaid $260,000 in long-term debt during Q1 2025, compared to $50,000 in Q1 2024[19] - The balance of accounts receivable, trade, net, was $387.1 million as of March 31, 2025, compared to $391.7 million at December 31, 2024[29] - Contract liabilities increased to $2.0 million at March 31, 2025, from $1.4 million at December 31, 2024[30] - Total debt amounted to $640 million, with a weighted average interest rate of 5.17% for the Loan Security Agreement (LSA)[66] Segment Performance - Truckload Transportation Services revenue was $501.9 million, down from $551.1 million year-over-year, representing a decline of 8.9%[28] - Operating revenues from the United States were $675.2 million, compared to $721.9 million in the prior year, reflecting a decrease of 6.5%[28] - Operating loss for the TTS segment was $0.9 million in Q1 2025, a significant decline from an operating income of $20.8 million in Q1 2024, resulting in a decrease in operating margin from 3.8% to (0.2)%[4][5] - The Werner Logistics segment's operating income was not specified, but it is noted that the segment is less asset-intensive and relies on third-party capacity providers[95] Investments and Capital Expenditures - The company has committed to property and equipment purchases of approximately $94.4 million as of March 31, 2025[69] - Net capital expenditures are estimated to be between $185 million and $235 million in 2025, compared to $234.9 million in 2024[133] Compliance and Internal Controls - The company was in compliance with financial covenants related to its $1.075 billion unsecured credit facility as of March 31, 2025[61] - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected the company's internal controls[146] - The management has confidence in the internal controls and procedures, although they acknowledge that these controls cannot prevent all errors or fraud[147] - The company’s disclosure controls and procedures are deemed effective at a reasonable assurance level for timely reporting to the SEC[145] Litigation and Risk Factors - The company recorded a liability of $45.8 million related to a jury verdict from a lawsuit, with a corresponding receivable of $79.2 million from insurance providers[74] - The company is involved in ongoing litigation, including class action claims, but management does not believe these will materially affect financial results[76] - There have been no material changes from the risk factors disclosed in the 2024 Form 10-K, indicating stability in the company's risk profile[151]

Core Insights - Werner Enterprises, Inc. (WERN) reported disappointing first-quarter 2025 results, with a loss per share of 12 cents, contrasting with the Zacks Consensus Estimate of earnings of 12 cents per share, marking a decline of over 100% year-over-year [1][2] Financial Performance - Total revenues for the quarter were $712.11 million, falling short of the Zacks Consensus Estimate of $746.8 million and decreasing by 7% year-over-year, primarily due to a $49.3 million (9%) drop in Truckload Transportation Services (TTS) revenues and a $6.9 million (3%) decline in Logistics revenues [2] - The company reported an adjusted operating loss of $1.80 million compared to an operating income of $18.59 million in the same quarter last year, with an adjusted operating margin of (0.3)%, down 270 basis points from 2.4% [2] Segment Analysis - In the TTS segment, revenues decreased by 9% year-over-year to $501.87 million, attributed to lower fuel surcharge revenues. Adjusted operating income fell 91% year-over-year to $1.96 million, impacted by an $8 million increase in insurance and claims expenses, a smaller fleet size, and elevated technology spending [4] - Logistics revenues totaled $195.55 million, down 3% year-over-year, but adjusted operating income improved to $674 million from an operating loss of $1.18 billion in the previous year, with an adjusted operating margin increase of 90 basis points to 0.3% [5] Management Commentary - The CEO, Derek Leathers, indicated that the first-quarter results were below expectations due to high insurance costs, extreme weather, a smaller fleet, and changes in customer activity due to tariff-induced uncertainty. However, there is optimism in the Dedicated segment with new fleet contracts expected to be implemented [3] - The company is focusing on aggressive restructuring efforts to reduce costs and leverage operational synergies from technology investments, aiming to drive growth in core business and improve margins [3] Liquidity and Capital Expenditure - As of March 31, 2025, Werner had cash and cash equivalents of $51.95 million, up from $40.75 million at the end of the previous quarter. Long-term debt stood at $640 million, slightly up from $630 million [6] - The company generated $29.37 million in cash from operations in the first quarter, with net capital expenditure amounting to $7.56 million [6] Future Outlook - For 2025, Werner anticipates TTS truck growth to improve in the range of 1-5%, with net capital expenditure estimated between $185 million and $235 million. The company projects dedicated revenues per truck per week to rise from breakeven to 3% in 2024 [8]

Financial Data and Key Metrics Changes - Revenues decreased by 7% year-over-year, with adjusted EPS at negative $0.12, down $0.25 from the previous year [5][22] - Adjusted operating margin was negative 0.3%, and adjusted TTS operating margin was 0.4% net of fuel surcharges [5][22] - Adjusted operating loss was $1.8 million, with TTS total revenue at $502 million, down 9% [23] Business Line Data and Key Metrics Changes - Dedicated revenue net of fuel was $279 million, down 7%, representing 64% of TTS trucking revenues [24] - One Way Truckload revenue net of fuel was $154 million, a decrease of 9%, with revenue per truck per week down 3.2% [26] - Logistics revenue was $196 million, down 3% year-over-year, with intermodal revenues increasing by 14% [28] Market Data and Key Metrics Changes - Approximately 10% of total revenues are from cross-border Mexico shipments, with stable volumes across discount retail customers [18][20] - The company noted that long-haul truckload employment is below prior peak levels, which could lead to favorable conditions for larger carriers [21] Company Strategy and Development Direction - The company is focused on three priorities: driving growth in core business, operational excellence, and capital efficiency [12][14] - A commitment to cost containment has led to an increase in the 2025 cost savings target from $25 million to $40 million [30] - The company plans to maintain strong operating cash flow and is well-positioned for share repurchase and M&A opportunities [16][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that Q1 results did not meet expectations due to elevated insurance costs, extreme weather, and IT spending [4][5] - Despite challenges, management expressed confidence in long-term growth, particularly in the Dedicated segment and technology transformation [8][21] - The company is preparing for potential market corrections and believes that ongoing capacity attrition could benefit larger carriers [21][67] Other Important Information - The company closed a new $300 million credit facility, increasing liquidity to $777 million, up nearly 70% from year-end [31][32] - The average age of the truck and trailer fleet was 2.2 and 5.4 years, respectively, providing flexibility in equipment purchases [37] Q&A Session All Questions and Answers Question: Can you walk us through dedicated margins and their long-term impacts? - Management indicated that dedicated margins typically outperform one-way margins and recent wins are expected to contribute positively to operating margins [43][45] Question: What causes the insurance concerns to mitigate? - Management emphasized the need for tort reform and highlighted ongoing efforts to reduce preventable accident rates [58][60] Question: How is the market correcting regarding supply and demand? - Management noted that while demand indicators were strong, tariff uncertainty and network disruptions have created challenges, but they expect capacity attrition to accelerate [66][67] Question: What percentage of volume originates overseas? - Approximately 10% of one-way volume is exposed to the West Coast, and retail customers have a 10% to 30% exposure rate to China [75][80] Question: How are acquisitions performing? - Management expressed confidence in customer receptivity and growth within acquired businesses, but acknowledged the need for more immediate actions to leverage these assets [82][84]

Core Insights - Werner Enterprises reported a revenue of $712.11 million for the quarter ended March 2025, reflecting a decline of 7.4% year-over-year and a surprise of -4.65% compared to the Zacks Consensus Estimate of $746.81 million [1] - The company's EPS was -$0.12, a significant drop from $0.14 in the same quarter last year, resulting in an EPS surprise of -200.00% against the consensus estimate of $0.12 [1] Financial Performance Metrics - The operating ratio for Truckload Transportation Services was reported at 100.2%, exceeding the three-analyst average estimate of 96.5% [4] - Average trucks in service for Dedicated services were 4,783, below the two-analyst average estimate of 5,044 [4] - Year-over-year revenue change for One-Way Truckload in total miles per truck per week was -3.5%, compared to an estimated -0.5% by two analysts [4] - Revenues from Werner Logistics were $195.56 million, lower than the three-analyst average estimate of $204.15 million, marking a year-over-year decline of -3.4% [4] - Truckload Transportation Services reported revenues of $501.88 million, which was below the $530.15 million average estimate, representing an 8.9% year-over-year decline [4] - Trucking revenues, net of fuel surcharge, were $433.07 million, compared to the average estimate of $458.51 million, indicating a -7.8% change year-over-year [4] - Non-trucking and other revenues increased by 35.1% year-over-year, reaching $11.16 million, surpassing the average estimate of $9.90 million [4] - Dedicated trucking revenues, net of fuel surcharge, were $278.65 million, below the average estimate of $299.14 million, reflecting a -7.4% year-over-year change [4] - One-Way Truckload trucking revenues, net of fuel surcharge, were $154.42 million, compared to the estimated $164.13 million, showing an -8.5% change year-over-year [4] Stock Performance - Over the past month, shares of Werner have returned -4.3%, while the Zacks S&P 500 composite experienced a -0.8% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

1Q25 EARNINGS PRESENTATION April 29, 2025 1 DISCLOSURE STATEMENT This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are based on information presently available to the Company's management and are current only as ...

Company Performance - Werner Enterprises reported a quarterly loss of $0.12 per share, matching the Zacks Consensus Estimate, and down from earnings of $0.14 per share a year ago, indicating an earnings surprise of -200% [1] - The company posted revenues of $712.11 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 4.65% and down from $769.08 million year-over-year [2] - Over the last four quarters, Werner has not surpassed consensus EPS or revenue estimates [2] Stock Outlook - Werner shares have declined approximately 21.9% since the beginning of the year, compared to a -6% decline in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.27 on revenues of $779.05 million, and for the current fiscal year, it is $1.11 on revenues of $3.13 billion [7] Industry Context - The Transportation - Truck industry, to which Werner belongs, is currently in the bottom 5% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Werner's stock performance [5][6]