Werner’s (WERN) fourth-quarter earnings and revenue beat, stocks gain

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Werner Enterprises Inc.. WERN announced better-than-expected earnings and revenue for the fourth quarter of 2021. Earnings and revenue also increased significantly year-over-year. Following this strong performance, shares of WERN gained 3.2% in after-hours trading on February 3.

Werner’s fourth-quarter earnings (excluding 2 cents of one-time items) of $1.13 per share beat Zacks’ consensus estimate of 96 cents. Net profit increased by 27% on an annual basis.

Total revenue of $765.2 million also topped Zacks’ consensus estimate of $725.1 million. Revenue increased 23.4% year-on-year, primarily driven by higher revenues in the Truckload Services and Logistics segments.

Operating profit (adjusted) was $101.1 million in the current quarter, up 22% year-over-year. Adjusted operating margin decreased by 10 basis points (bps) to 13.2%. Operating expenses increased by 23.7% to $666.7 million.

Werner Enterprises, Inc. Price, Consensus, and EPS Surprise

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

Sector results

Revenue from the Truckload Transportation Services (TTS) segment increased 19% year-over-year to $563.2 million. The increase can be attributed to an 87% increase in fuel surcharge revenue. Adjusted operating profit increased 13% to $90 million. Adjusted operating margin fell 80 basis points to 16%. The adjusted operating ratio (operating expenses as a percentage of revenues) deteriorated by 80 basis points to 84%. The lower the metric value, the better.

Logistics segment revenue totaled $185 million, up 42% year-over-year. The benefit can be attributed to a 58% increase in truckload logistics revenue (driven by a 29% increase in revenue per shipment and a 23% increase in shipments). The segment reported operating profit of $11.7 million, up more than 300% year-over-year. The operating margin was 6.3%, reflecting an improvement of 430 basis points. The Others segment accounted for the rest of the revenue.

Liquidity

As of December 31, 2021, Werner, currently carrying a Zacks Rank #3 (Hold), had cash and cash equivalents of $54.20 million, compared to $29.33 million at the end of 2020. Debt (net of current portion) totaled $422.50 million at the end of the fourth quarter, compared to $175 million at the end of 2020.

Outlook

Werner predicts TTS truck growth of 2-5% for 2022 compared to the figure published a year ago. Net capital expenditures are estimated in the range of $275-325 million.

According to the TTS forecast, WERN estimates that dedicated revenue per truck per week will increase by 3-5% in 2022 due to high rate expectations. One-way truckload revenue per total mile is expected to increase 16-19% in the first half of 2022 compared to the comparable period of 2021 due to increased contractual rates and higher spot rates as well as changes in composition of the fleet.

Werner expects the age of trucks to be 2.2 years for 2022 (corresponding to 2021), while the age of trailers in 2022 is expected to be 4.8 years, compared to 4.5 years at the end of 2021.

Sector insights

In the broader transport sector, CSX Company CSX, Canadian National Railway CNI and GATX Company GATX recently released its fourth quarter 2021 results.

CSX, which currently carries a Zacks No. 3 ranking, reported Q4 2021 earnings of 42 cents per share, which topped the Zacks consensus estimate by a penny. Net income improved double-digit year-over-year on higher revenue.

CSX’s total revenue of $3,427 million topped Zacks’ consensus estimate of $3,296 million. Revenue increased 21.3% year-over-year due to growth across all of its businesses as well as revenue from Quality Carriers, which the company acquired in July 2021.

Canadian National, which currently has a Zacks rating of 3, reported fourth-quarter 2021 earnings (excluding 2 cents of one-time items) of $1.36 per share (CA$1.71), which topped the Zacks consensus estimate of $1.21. Net income grew double-digit year-over-year on lower costs.

Canadian National’s quarterly revenue of $2,977.4 million (C$3,753 million) beat Zacks’ consensus estimate of $2,917.4 million. Revenue improved year over year, driven by higher freight rates and fuel surcharges.

GATX, currently sporting a Zacks No. 1 ranking (Strong Buy), reported fourth quarter 2021 earnings (excluding 11 cents of one-time items) of $1.58 per share, which beat the consensus estimate. Zacks of $1.07. Net income jumped more than 200% year over year. You can see the full list of today’s Zacks #1 Rank stocks here.

GATX’s total revenue of $321 million increased 5.3% year-over-year, primarily driven by a 5.2% rise in rental revenue to $288.4 million of dollars. Rental income contributed 89.8% of turnover.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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