Werner announces 50% increase in 1Q profit

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Werner Enterprises reported Wednesday, April 20, that despite the recent cost headwinds of three unusually severe winter storms during the first five weeks of first quarter 2011 and rising diesel fuel prices during the latter part of first quarter 2011, the company’s earnings grew 50 percent to $16.3 million in the first quarter of 2011 compared to $10.8 million in the first quarter of 2010. Total revenue was $469.4 million compared to $425.1 million, a 10 percent increase.

The company said freight trends in its One-Way Truckload business improved significantly beginning the second week of February to levels higher than 2010 and improved further in March, while its Midwest freight demand particularly strong, followed closely by most of its other domestic geographic areas, except for the West which showed less strength. “We are encouraged by recently improving truckload freight trends, which we believe are caused to a greater degree by industry capacity constraints than economic recovery,” the Omaha, Neb.-based company said.

Average revenues per total mile increased 4.5 percent as a result of customer contractual rate increases, freight mix improvement and strong customer demand for truck capacity. “We have been very successful in this tightening capacity environment in working jointly with our customers to secure sustainable solutions across all modes,” the company said. “We are committed to maintaining our fleet count at approximately 7,300 trucks. We remain focused on expanding our operating margin to raise our returns on assets, equity and invested capital, while staying true to our expanded portfolio of services for our customers.”

Werner said the driver recruiting and retention market remains competitive. “An improved freight market, extended unemployment benefit programs, changing industry safety regulations and reduced financing options for driving school candidates continue to tighten qualified and student driver supply,” the company said. “We expect driver market challenges to increase as the year progresses. We continue to believe our position in the current driver market is better than that of many competitors because over 70 percent of our driving jobs reside in more attractive, shorter-haul Regional and Dedicated fleet operations that enable us to return these drivers to their homes on a more frequent and consistent basis.”