Yahoo Finance Werner (WERN) Rides on Segmental Growth Amid Rising Expenses
Werner Enterprises, Inc.'s WERN top line is benefiting from strength in the Truckload Transportation Services (TTS) and Logistics segments. Werner’s bullish guidance for 2022 is also encouraging.
The company recently reported third-quarter 2022 earnings of 90 cents per share, which missed the Zacks Consensus Estimate of 97 cents. However, the bottom line rose 14% on a year-over-year basis.
Total revenues of $827.6 million outperformed the Zacks Consensus Estimate of $819.8 million and increased 18% on a year-over-year basis due to higher revenues in the TTS and Logistics segments.
Werner Enterprises, Inc. Price, Consensus and EPS Surprise
Werner Enterprises, Inc. price-consensus-eps-surprise-chart | Werner Enterprises, Inc. Quote
How is Werner Doing?
We are impressed by Werner’s bullish guidance for 2022. Werner now anticipates TTS growth of 3-5% (prior view: 2-5%) for 2022 from the year-ago quarter’s reported figure. Under the TTS guidance, WERN continues to estimate Dedicated revenue per truck per week to increase 6-8% in 2022, owing to expectations of strong rates.
Werner expects the truck age to be 2.3 years (prior view: 2.2 years) for 2022 (commensurate with 2021), while the 2022 trailer age is forecasted to be five years (prior view: 4.8 years). The effective income tax rate is still expected to be at 24.5-25.5%.
On the flip side, rising operating expenses raise concerns for Werner. In third-quarter 2022, total operating expenses (on a reported basis) increased 18.9% to $751.35 million. This metric was primarily driven by increased salaries, wages and benefits (up 12.9%), fuel (up 73.1%) as well as rent and purchased transportation expenses (up 16.4%). If operating expenses continue to rise in the coming quarters, bottom-line growth is likely to be severely hampered.
Further, Werner exited the third quarter of 2022 with cash and cash equivalents of $125.68 million, way below the long-term debt (net of the current portion) of $568.75 million. This implies that the company does not have enough cash to meet its debt levels.
Zacks Rank and Stocks to Consider
Currently, Werner carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader Zacks Transportation sector are Air Transport Services Group ATSG, Ryder Systems R and Teekay Tankers Ltd. (TNK), each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ATSG has an expected earnings growth rate of 34.34% for the current year. ATSG delivered a trailing four-quarter earnings surprise of 17.78%, on average.
The Zacks Consensus Estimate for ATSG’s current-year earnings has improved 5.2% over the past 90 days. Shares of ATSG have gained 7.9% over the past year.
Ryder has an expected earnings growth rate of 67.12% for the current year. R delivered a trailing four-quarter earnings surprise of 30.13%, on average.
The Zacks Consensus Estimate for R’s current-year earnings has improved 6.9% over the past 90 days. Shares of R have gained 12.7% over the past year.
Teekay Tankers has an expected earnings growth rate of 214.91% for the current year. TNK delivered a trailing four-quarter earnings surprise of 42.23%, on average. Teekay Tankers has a long-term expected growth rate of 3%.
The Zacks Consensus Estimate for TNK’s current-year earnings has improved 95% over the past 90 days. Shares of TNK have soared 190% over the past year.
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Werner Enterprises, Inc. (WERN) : Free Stock Analysis Report
