Werner Enterprises reported improved revenues and operating income for the second quarter ended June 30, 2017, with the former increasing by 4% to $519.51m, and the latter rising 25% to $36.91m. The improvement was driven by the company’s core Truckload Transportation Services business, whilst Werner Logistics recorded declines in both revenue and operating income.
Truckload Transportation Services (net of fuel surcharges) reported revenues of $347.43m, reflecting a 4% year-on-year improvement; meanwhile, operating income rose by 58.29% to $36.04m. The company noted that freight demand in the One-Way Truckload fleet improved seasonally throughout the quarter, with volumes above the seasonal average. Average revenues per tractor per week increased 4.1% in second quarter 2017 compared to second quarter 2016, due to a 2.4% increase in average revenues per total mile and a 1.7% increase in average miles per truck.
During the second and third quarter of 2016, to take advantage of a strengthening Dedicated market, Werner Enterprises moved trucks from One-Way Truckload, lessening the need to find freight for trucks in the more challenged one-way truckload market. The shifting of trucks to shorter-haul Dedicated from longer-haul One-Way Truckload had a favourable impact on revenue per total mile and an unfavourable impact on miles per truck. Assuming this freight volume trend continues, Werner Enterprises expects contractual rates to begin to improve over the next few quarters, particularly noting the expected tightening of supply when the electronic hours of service mandate for the trucking industry becomes effective in December of this year.
In second quarter 2017, Werner Logistics revenues decreased by 3% to $100.8m, and operating income decreased 65% to $2.29m, compared to second quarter 2016. The division achieved solid revenue growth year over year in the truck brokerage solution, while intermodal and international solutions had lower revenues due to more challenging market
conditions. A significant factor in the division’s financial performance is the departure of a large Werner Logistics Freight Management customer (5.7% of Werner Logistics revenues in second quarter 2016), which was acquired in 2015 and transitioned to their parent company’s transportation platform mid-quarter during first quarter 2017.
Source: Werner Enterprises
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