Werner Enterprises posted second-quarter adjusted earnings of 86 cents per share after the close, in line with consensus estimates and 20 cents better than the year-ago quarter.
Total revenue increased 14% year-over-year to $649.8 million for the quarter, boosted by Werner’s logistics unit, which increased 29% to $141.6 million.
Derek J. Leathers, Werner’s chairman, president and CEO, credited the strong quarter to a strong freight market and economy buoyed by consumer retail spending.
“We continue to expect strong freight demand through the rest of this year and well into 2022,” Leathers said during the company’s quarterly earnings call Thursday. “Retail inventories require significant replenishment, which will take time and bodes well for retail freight demand going forward.”
Werner (NASDAQ: WERN) is an Omaha, Nebraska-based truckload transportation and logistics services company with customers across the U.S., Mexico and Canada.
The company’s Truckload Transportation Services (TTS) segment posted revenue of $491.2 million, a 10% increase over the same period last year. Operating income was $74.4 million for the quarter, up 33% compared to 2020.
The company’s one-way segment reported a 14.7% year-over-year increase in revenue per truck per week to $4,709. The dedicated truckload segment revenue per truck per week increased 18.2% to $4,079.
Revenue per total mile, excluding fuel surcharges, increased 16.7% in the one-way fleet.
Werner’s TTS segment had 7,664 trucks in service and 23,090 trailers. The operating ratio was 82.9%, 340 basis points lower year-over-year.
Leathers said the driver shortage is the most severe he has ever seen in the trucking industry, affecting rates and requiring the company to increase pay in certain lanes and markets.
“Traditional industry headwinds remain, including aging demographics and recruiting for the trucking life,” he said. “Werner is well positioned to thrive in this business environment as a result of our consumer-oriented freight base.”
The logistics segment recorded a 29% year-over-year increase in revenue to $141.6 million.
“Despite much higher capacity costs, which impacted our gross margin percentage for our contract business, we improved pricing and operational efficiency, leading to better logistics results,” Leathers said.
More than 50% of Werner’s top 50 customers were retailers, followed by food and beverage at 20%, manufacturing 19%, and logistics 10%.
On July 1, Werner announced it had acquired an 80% equity stake in ECM Transport Group (ECM) for $142.4 million.
The ECM group of companies includes regional truckload carriers Cheswick, Pennsylvania-based ECM Transport, which operates a fleet of 450 trucks, and Motor Carrier Service, which has 50 trucks and is headquartered in Northwood, Ohio.
“ECM adds 500 trucks and 2,000 trailers to our combined one-way truckload fleet and provides us with a short haul regional fleet presence to serve customers in the Mid Atlantic, Ohio and Northeast geographic markets,” Leathers said.
Click for more FreightWaves articles by Noi Mahoney.
More articles by Noi Mahoney
US wants to reclaim critical rare earth supply chain