Werner Posts Solid 3Q EPS, Reduces Visibility

Werner's WERN 3Q EPS was slightly above consensus and J.P Morgan's forecast driven by better than expected cost-side performance. WERN's comments were cautious on demand trends in October, which have slowed somewhat from September. While the broader story of constrained capacity is likely to provide a favorable backdrop, our sense is that the recent loss of momentum in the truckload market is likely to work against WERN and the truckload carrier stocks in the near term. WERN's 3Q10 EPS of $0.33 was slightly above J.P Morgan's forecast and consensus of $0.32. While there may still be some late seasonal pickup in the truckload market in late October / early November, JPM believes a sharp peak season with significant tightness in the truckload market is unlikely. WERN is trading 2% lower at $20.64