Werner Enterprises (WERN) Tops Q3 EPS by 3c, Revenues Miss

Werner Enterprises (NASDAQ: WERN) reported Q3 EPS of $0.69, $0.03 better than the analyst estimate of $0.66. Revenue for the quarter came in at $590.2 million versus the consensus estimate of $602.96 million.

Third Quarter 2020 Highlights (all metrics compared to third quarter 2019 unless otherwise noted)

• Total revenues of $590.2 million, down 5% year over year (YoY), up 4% sequentially
• Operating income of $62.1 million, up 16% YoY, up 18% sequentially; non-GAAP adjusted operating income of $64.3 million, up 19% YoY, up 11% sequentially
• Operating margin of 10.5%, up 190 basis points (bps) YoY, up 120 bps sequentially; non-GAAP adjusted operating margin of 10.9%, up 210 bps YoY, up 80 bps sequentially
• Record diluted EPS of $0.67, up 19% YoY, up 18% sequentially; non-GAAP adjusted diluted EPS of $0.69, up 21% YoY, up 12% sequentially
• Establishment of a formal organization-wide sustainability strategy and the introduction of three milestone goals

“The rapidly recovering economy and tight driver market produced strong freight conditions in third quarter 2020, which have continued into October,” said Derek J. Leathers, President and Chief Executive Officer. “I am extremely proud of how our entire Werner team has stepped up to the challenge with superior on-time service during a period with unique and demanding operating conditions.

“One-Way Truckload freight demand was strong and improved throughout third quarter 2020. Dedicated freight demand remained strong during the quarter, particularly for our essential products customers who constitute nearly three-quarters of our Dedicated freight base. Due to the unprecedented large and rapid rise in spot truckload rates during third quarter, the cost of third-party truckload capacity increased significantly for our contractual Truckload Logistics business which reduced our Logistics gross margin and operating income. We continue to effectively and proactively manage our controllable costs without compromising our exceptional customer service.

“While there remain significant uncertainties related to COVID-19 and its effect on the economy, we are confident that demand for our services will remain strong for the foreseeable future. Customer inventory levels have been depleted and are expected to take multiple quarters to restock as the U.S. economy recovers. Driver supply constraints persist.”

For earnings history and earnings-related data on Werner Enterprises (WERN) click here.

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