The Top 5 Analyst Questions From Werner's Q1 Earnings Call
Is now the time to buy WERN? Find out in our full research report (it's free).
Revenue: $712.1 million vs analyst estimates of $737.2 million (7.4% year-on-year decline, 3.4% miss)
Adjusted EPS: -$0.12 vs analyst estimates of $0.12 (significant miss)
Adjusted EBITDA: $65.73 million vs analyst estimates of $89.32 million (9.2% margin, 26.4% miss)
Operating Margin: -0.8%, down from 2% in the same quarter last year
Market Capitalization: $1.7 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Jason Seidl (TD Cowen) asked about the margin dynamics between dedicated and One-Way divisions. CEO Derek Leathers clarified that dedicated margins outperformed One-Way, which remained under pressure, and that new dedicated wins should be margin accretive as they ramp up.
Ari Rosa (Citigroup) pressed on structural changes to address insurance cost volatility. Leathers acknowledged the unpredictability, emphasizing ongoing focus on safety and legislative advocacy but conceding that outsized verdicts remain a material industry risk.
Scott Group (Wolfe Research) questioned whether recent M&A activity contributed to the operating loss. Leathers responded that acquisitions occurred before the freight downturn and have yet to deliver full operating leverage, but customer growth remains positive within acquired businesses.
Bascome Majors (Susquehanna) inquired about the effects of tariff uncertainty on retailer customer discussions and bid season. Management noted that retail customers are seeking execution certainty, with more business shifting from spot to contract, and that bid outcomes and actual volumes are tracking more closely this year.
Chris Wetherbee (Wells Fargo) sought clarity on the timeline and financial benefits of the EDGE TMS technology rollout. Leathers stated that full productivity gains are expected to materialize late Q3 into Q4, with logistics operations already seeing some improvement.
In the coming quarters, the StockStory team will be monitoring (1) the successful onboarding and performance of newly awarded dedicated fleet contracts, (2) progress toward achieving the increased cost savings target and the resulting impact on margins, and (3) the pace and effectiveness of the EDGE TMS technology rollout across all business lines. Developments in tariff policy and insurance claim trends will also be important external factors to watch.
Werner currently trades at $27.55, in line with $27.66 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it's free).
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