Werner Enterprises (NASDAQ: WERN) issued third-quarter adjusted earnings guidance of 15 to 16 cents per share on Monday, well below the consensus estimate of 36 cents, according to FreightWaves.
The truckload carrier cited 18 cents in cumulative cost headwinds. They include elevated diesel fuel prices, higher driver recruitment and retention expenses, and a reserve adjustment for prior insurance claims. Werner forecast third-quarter revenue of $946 million to $951 million, slightly under the $953.6 million analysts expected.
Werner's prior outlook called for a 10% to 13% year-over-year increase in revenue per total mile at its one-way fleet. That metric rose 10% in the second quarter, and truck utilization improved 16%. The dedicated fleet, which makes up 80% of Werner's truckload network, was guided to a 3% to 5% increase in revenue per truck per week for the full year.
Truckload fuel surcharges operate on a one-week lag. Diesel prices rose sequentially in nine of the 13 weeks of the quarter. Retail diesel dipped 1% in July, then climbed 10% in August and another 15% in September.
Werner executives said in August that the post-July 4 slowdown reflected a seasonal lull ahead of peak season. They pointed to a truckload capacity correction that removed unsafe and non-compliant drivers as the main driver of the outlook. The shrinking supply has allowed carriers to raise rates this year for the first time after a downturn of nearly four years.
Werner shares were down 1.1% on Monday morning and have fallen 31% since a mid-July peak. The company will report full third-quarter results on Oct. 27 after the market closes.
Source: FreightWaves - https://www.freightwaves.com/news/werner-enterprises-issues-q3-profit-warning