Werner Enterprises Inc. reported revenues increased 14 percent to $584.1 million in third quarter 2008 compared to $510.3 million in third quarter 2007. Revenues, excluding trucking fuel surcharges, increased 4 percent to $448.5 million compared to $433.0 million. Net income was $22.4 million compared to $21.9 million a year ago.
For the nine-month period ended Sept. 30, revenue increased to $1.68 billion compared to $1.55 billion a year ago. Revenues, excluding trucking fuel surcharges, were $1.31 billion compared to $1.33 billion. Net income was $48.9 million compared to $59.8 million a year ago.
The Omaha, Neb.-based company said the ongoing diversification of its service offerings — from the one-way van fleet to dedicated, regional, expedited and North America cross-border in the truckload segment; and freight management, intermodal, brokerage and Werner Global Logistics international in the value-added services segment — helped lessen the impact of a lackluster freight market in third quarter 2008. “Customer response to these growing service offerings continues to be very positive,” the company said. “Werner intends to continue its customer-centric strategy of diversifying and growing these service offerings.”
The company said freight demand for its van network of nearly 4,700 trucks in its regional, expedited and medium-to-long haul fleets was less encouraging during third quarter 2008; the pre-book percentages in July, August and September 2008 were about the same as July, August and September 2007. The strengthening of demand Werner experienced in June 2008 did not continue into third quarter 2008; however, third quarter 2008 pre-books were relatively stable year over year, compared to weaker year-over-year pre-books experienced during the first five months of 2008. Werner believes that as a result of a significant number of carrier failures that occurred during the first half of 2008, industry capacity remained more in balance with freight demand in third quarter 2008 compared to the excess of capacity at the beginning of 2008.
Freight demand during the latter part of third quarter 2008 and the first two weeks of October 2008 has been disappointing but not unexpected, considering the turbulence and uncertainty in the financial markets, the company said. Consumer spending is being affected by the current lack of confidence in the credit market and the stock market, Werner said, and it is planning based on the assumption that this trend will continue. The company expects this will result in lackluster shipping volumes during the upcoming peak freight season.
The company said the severe tightening of the credit and financial markets may create significant challenges for highly leveraged carriers that have financing issues or refinancing needs. Unless freight and financial market conditions improve quickly, Werner believes there is a higher probability of increased carrier failures. Werner believes its financial strength as a debt-free company places it in a unique position to capitalize on the opportunities ahead.
