Werner Enterprises, Inc. WERN reported adjusted earnings per share of 62 cents for the second quarter, significantly better than the 40-cents-per-share consensus estimate and only a penny light of last year's result.
The result excluded 4 cents per share in incremental depreciation expense associated with a change in the lifespan of trucks that will be sold this year and a smaller amount in accrued insurance and claims expense for a prior accident.
The transportation and logistics provider reported a 9.3% year-over-year decline in consolidated revenue to $569 million, largely offset by a 70-basis-point adjusted operating margin improvement to 10.1%.
"Our results in second quarter 2020 reflect freight demand in One-Way Truckload and Logistics that was lower than the same period a year ago. In April 2020, the impact of some customers closing or significantly curtailing their businesses caused a weakness in freight volumes, said Werner President and CEO Derek Leathers in the company's press release following the market close on Wednesday.
Leathers noted that freight volumes improved beginning in mid-May, continuing thus far in July. Currently, the carrier's one-way segment is seeing "relatively strong" demand that is higher than July 2019.
Werner's key performance indicators
Revenue in the company's trucking segment was down 7.3% year-over-year, with revenue per tractor per week declining 2.2% in the one-way segment and up 3.9% in dedicated. The division posted an 86.3% operating ratio (OR), 110 basis points better than the year-ago quarter.
"We proactively managed and adapted our fleet and cost structure without compromising outstanding service. This enabled us to minimize the impact of the softer freight market on our results," stated Leathers.
The company now expects total tractor count to be down 1%-3% in 2020. Revenue per total mile in the one-way segment is expected to be down 1% to up 2% year-over-year in the second half of 2020.
The company will host a conference call to discuss these results with analysts and investors Wednesday at 5 p.m. Stay tuned to FreightWaves for more coverage on Werner's earnings report.
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