Werner Enterprises saw one other tough quarter to shut 2023 and said it’ll proceed to favor investment in its dedicated fleet over one-way operations.
The corporate’s 2024 guidance calls for the overall truck count to be down 3% to flat, noting that the one-way truckload market is “uninvestable” at the present moment as rates proceed to be pressured by excess capability and tepid demand.
The one-way segment saw an 11% 12 months over 12 months (y/y) decline in average trucks in service to 2,929 units throughout the fourth quarter. Average trucks in use on the dedicated side were off just 3% y/y to five,239 as some customers have reduced the variety of trucks needed every day.
“We’re not going to proceed to run a network in one-way on the return levels that we’re seeing today … we owe it to our shareholders and others to be sure that isn’t the case,” said Chairman and CEO Derek Leathers on a Tuesday evening call with analysts.
The corporate achieved a $43 million cost savings run rate by the top of 2023 and has identified $40 million in recent savings opportunities for 2024, of which, only 15% overlap with the prior 12 months.
Werner (NASDAQ: WERN) reported fourth-quarter adjusted earnings per share of 39 cents, 4 cents light of the consensus estimate and 60 cents lower y/y. The result excluded acquisition-related expenses, costs from an insurance claim that has been appealed and changes to earnouts.
In comparison with the 2023 fourth quarter, lower gains on sale were a 26-cent headwind, net interest expense (debt down $45 million y/y but variable interest expense up) was a 3-cent headwind, a lower tax rate was a 1-cent tailwind and a lower loss on equity investments was a 2-cent tailwind.
The corporate saw an 11% decline within the variety of trucks sold but a greater than 60% increase in trailers sold. Much lower per-unit gains were the wrongdoer.
Werner’s dedicated business saw revenue decline 2% y/y to $309 million. Revenue per truck per week was up 1%. The total-year 2024 outlook calls for the utilization metric to be flat to three% higher.
Werner’s one-way segment reported a 12% y/y revenue decline to $178 million. Revenue per truck per week was down just 1% with the drop in tractor count accounting for the remainder of the decline. Revenue per total mile was off 9% within the quarter and is anticipated to say no 6% to three% y/y in the primary half of 2024.
Total truckload operations produced a 92.5% adjusted operating ratio (the inverse of operating margin), 830 basis points worse y/y.
The logistics segment reported a 6% y/y increase in revenue to $227 million. The number was partially boosted by a brokerage acquisition last November. The segment was profitable, recording a 1.3% operating margin, which was 250 bps worse y/y.
![](https://www.freightwaves.com/wp-content/uploads/2024/02/06/Werners-KPI-table.jpg)
More FreightWaves articles by Todd Maiden
- Bankrupt Yellow repays principal, interest on COVID loan
- Weather, tonnage declines offset by cost reductions in ArcBest’s Q4
- Transportation prices grow for first time in 19 months, survey says
The post Werner reports Q4 miss appeared first on FreightWaves.