Werner Falls Short of Q1 Earnings and Revenue Expectations

Werner Enterprises, Inc. (WERN) reported disappointing first-quarter 2025 results wherein both the top and the bottom lines lagged the Zacks Consensus Estimate. The company incurred a quarterly loss per share of 12 cents in contrast to the Zacks Consensus Estimate of earnings of 12 cents per share. The bottom line declined more than 100% on a year-over-year basis.

Total revenues of $712.11 million lagged the Zacks Consensus Estimate of $746.8 million and dipped 7% on a year-over-year basis due to a $49.3 million, or 9% decrease in Truckload Transportation Services (TTS) revenues and a $6.9 million, or 3% decline in Logistics revenues.

WERN reported adjusted operating loss of $1.80 million against the operating income of $18.59 million in the year-ago reported quarter. Adjusted operating margin of (0.3)% declined 270 basis points from 2.4%.

Werner Enterprises, Inc. Price, Consensus and EPS Surprise

Werner Enterprises, Inc. price-consensus-eps-surprise-chart | Werner Enterprises, Inc. Quote

Derek Leathers, WERN’s chairman and chief executive officer, stated, “First quarter 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. Despite these challenges, we are seeing strength in Dedicated with a streak of wins in new fleet contracts to be implemented in the coming quarters. One-Way Truckload revenue per total mile was up modestly for the third consecutive quarter, despite weather disruptions, increased deadhead, and network inefficiencies. Logistics improved operating income and margin with ongoing focus on cost management.”

Leathers further added, “We are undertaking more aggressive restructuring efforts to drive out additional costs and to realize operational synergies from our technology investments. We are committed to driving growth in core business, expanding margins, increasing rates and maintaining strong operating cash flow.”

WERN’s Q1 Segmental Results

Revenues in the TTS segment fell 9% on a year-over-year basis to $501.87 million due to lower fuel surcharge revenues. Adjusted operating income of $1.96 million fell 91% year over year owing to an $8 million increase in insurance and claims expense, a smaller fleet size, elevated technology spend and lower gains on the sale of property and equipment. Adjusted operating margin of 0.4% declined 370 basis points.

Logistics’ revenues totaled $195.55 million, down 3% year over year. Adjusted operating income came in at $674 million against the operating loss of $1.18 billion in the year-ago reported quarter. Adjusted operating margin increased 90 basis points year over year to 0.3%.

Liquidity

As of March 31, 2025, Werner had cash and cash equivalents of $51.95 million compared with $40.75 million at the prior-quarter end. Long-term debt (net of current portion) totaled $640 million at the end of the reported quarter compared with $630 million at the prior-quarter end.

The company generated $29.37 million of cash from operations in first-quarter 2025. Net capital expenditure amounted to$7.56 million.

WERN did not repurchase any shares during the first quarter of 2025. As of March 31, 2025, WERN had 3.9 million shares remaining under its share repurchase authorization.

WERN’s Outlook

For 2025, Werner anticipates TTS truck growth to improve in the range of 1-5%. Net capital expenditure is estimated to be in the range of $185-$235 million. Under the TTS guidance, WERN projects dedicated revenues per truck per week to rise from breakeven to 3% in 2024.

Full-year 2025 tax rate is anticipated to be in the range of 25%-26%.

WERN’s Zacks Rank

Currently, Werner carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We note that another major player from the Zacks Transportation-Truck industry, Landstar System LSTR, will report its first-quarter earnings numbers later this month. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Landstar System is scheduled to report first-quarter 2025 earnings on May 13. The company’s performance in the first quarter is expected to have suffered from weak freight demand, geopolitical uncertainty, tariff-related uncertainties and high inflationary pressure.

LSTR has outpaced the Zacks Consensus Estimate for earnings in two of the last four quarters (missing the mark on the other two occasions). The average miss is 0.6%.

Q1 Performances of Other Transportation Companies

United Airlines

United Airlines’ UAL first-quarter 2025 earnings per share (excluding 25 cents from non-recurring items) of 91 cents surpassed the Zacks Consensus Estimate of 75 cents. In the year-ago quarter, the Chicago-based airline reported a loss of 15 cents per share. 

Operating revenues of $13.21 billion fell marginally short of the Zacks Consensus Estimate of $13.22 billion. The top line increased 5.4% year over year despite the tariff-induced slowdown in domestic air travel demand. Passenger revenues (which accounted for 89.7% of the top line) rose 4.8% to $11.9 billion. UAL flights transported 40,806 passengers in the first quarter, up 3.8% year over year.

Delta Air Lines

Delta Air LinesDAL reported first-quarter 2025 earnings (excluding 9 cents from non-recurring items) of 46 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents. Earnings increased 2.2% on a year-over-year basis due to low fuel costs.

Revenues in the March-end quarter were $14.04 billion, surpassing the Zacks Consensus Estimate of $13.81 billion and increasing 2.1% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) rose 3.3% year over year to $13 billion.

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This article originally published on Zacks Investment Research (zacks.com).

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