Yahoo Finance Werner (WERN) Up 3.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Werner Enterprises (WERN). Shares have added about 3.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Werner due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Werner's Q1 Earnings Lag Estimates
Werner's first-quarter 2024 earnings of 14 cents per share lagged the Zacks Consensus Estimate of 28 cents and declined 77% on a year-over-year basis.
Total revenues of $769.08 million lagged the Zacks Consensus Estimate of $795.1 million and dipped 8% on a year-over-year basisdue to $37.2 million decrease in Truckload Transportation Services (TTS) revenues and a decline in Logistics revenues of $26.2 million.
Adjusted operating income of $18.6 million decreased 68% year over year. Adjusted operating margin of 2.4% declined 450 basis points from the year-ago reported quarter.
Segmental Results
Revenues in the TTS segment fell 6% on a year-over-year basis to $551.12 million due to lower fuel surcharge revenues. Adjusted operating income of $22.69 million fell 58% year over year owing to lower gains on the sale of property and equipment, lower revenue per total mile, net of fuel surcharge, in One-Way Truckload and overall smaller fleet size. Adjusted operating margin decreased 500 basis points to 4.1%.
Logistics’ revenues totaled $202.48 million, down 11% year over year. Adjusted operating loss came in at $1.18 million compared with an adjusted operating income of $6.35 million in the year-ago reported quarter. Adjusted operating margin decreased 340 basis points year over year.
Liquidity
As of Mar 31, 2024, Werner had cash and cash equivalents of $60.33 million compared with $61.72 million at the end of prior quarter. Long-term debt (net of current portion) totaled $596.25 million at the end of the reported quarter compared with $646.25 million at prior-quarter end.
The company generated $88.58 million of cash from operations in first-quarter 2024. Net capital expenditure amounted to $19.03 million.
During the reported quarter, WERN repurchased 0.2 million shares for a total cost of $6.5 million. As of Mar 31, 2024, WERN had 2.1 million shares remaining under its share repurchase authorization.
Outlook
For 2024, Werner now anticipates TTS truck growth to decline 6-3% (prior view: between (3%) and breakeven). Net capital expenditure is now estimated in the range of $250-$300 million (prior view: $260-$310 million).
Under the TTS guidance, WERN projects dedicated revenues per truck per week growth to rise from breakeven to 3% in 2024. One-way Truckload revenues per total mile are predicted to decline 6-3%.
Werner expects the average truck age to be 2.0 years for 2024, while the trailer age is forecast to be five years. Full year 2024 tax rate is anticipated in the range of 24.5% to 25.5%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -37.59% due to these changes.
VGM Scores
Currently, Werner has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Werner has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Werner belongs to the Zacks Transportation - Truck industry. Another stock from the same industry, Landstar System (LSTR), has gained 2.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Landstar reported revenues of $1.17 billion in the last reported quarter, representing a year-over-year change of -18.4%. EPS of $1.32 for the same period compares with $2.17 a year ago.
For the current quarter, Landstar is expected to post earnings of $1.47 per share, indicating a change of -20.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Landstar. Also, the stock has a VGM Score of B.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Werner Enterprises, Inc. (WERN) : Free Stock Analysis Report
Landstar System, Inc. (LSTR) : Free Stock Analysis Report
