Werner Enterprises Inc. (NASDAQ: WERN) reported non-GAAP adjusted earnings per share of $0.63, $0.01 shy of the consensus estimate, but $0.02 better than last year's report.
One of the nation's largest transportation and logistics companies, Werner reported revenue of $627.5 million, up 1 percent year-over-year as trucking revenue net of fuel surcharge increased 4 percent to $411.5 million and logistics revenue declined 2 percent in the period to $130.9 million.
The company's one-way truckload (TL) division reported a 1.5 percent increase in average tractors to 3,379 units with a 6 percent decline in revenue per tractor per week to $4,195. The dedicated fleet grew 8 percent to 4,558 average tractors in service with revenue per tractor per week increasing 4.1 percent to $3,833. Revenue per total mile declined 2.7 percent in the one-way TL division. The company's trucking operating ratio (net of fuel) eroded by 100 basis points to 87.4 percent.
WERN's Key Performance Indicators
"We are very pleased to report adjusted earnings per share growth of 3 percent, despite comparing to a very strong second quarter 2018 that produced 90 percent adjusted earnings growth due to unusually strong freight demand and pricing. The strength of our diversified portfolio, our new truck and trailer fleet, increasingly experienced drivers and our committed Werner team led to our superior performance," Werner President and Chief Executive Officer Derek J. Leathers said in the earnings press release.
Logistics revenue declined 2 percent as there were fewer project freight opportunities and "significantly" lower spot prices year-over-year. Logistics gross margin increased 40 basis points to 16.1 percent due to improved contractual pricing and capacity procurement. Operating margin for the division was 20 basis points worse year-over-year at 4 percent.
Werner's total adjusted operating income increased 1 percent year-over-year to $59.2 million. The company's consolidated adjusted operating margin declined 10 basis points to 9.4 percent.
Werner lowered its 2019 full-year guidance, which still calls for 3 percent to 5 percent truck growth, mostly in the dedicated division, albeit at the lower end of the range. The company plans to add 100 trucks in the third quarter of 2019, with no truck growth in the fourth quarter. Also, the company expects one-way revenue per total mile to be in a range of -3 percent to flat, which is significantly lower than the previous guidance range that focused on the low end of a 4 percent to 8 percent range.
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