Werner Falls Short of Q1 Earnings and Revenue Expectations

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]