Werner profit falls as demand weakens

Werner said it believes the weak freight market, combined with tight credit and financial markets, are making it increasingly difficult for debt-burdened trucking companies to survive. It said it expects that more fleet scale-backs and bankruptcies across the industry will put supply and demand more into balance over the next few quarters.

The Associated Press

4/17/2009

OMAHA, Neb. — Trucking and logistics company Werner Enterprises Inc. said Thursday its first-quarter profit fell 18 percent, as already weak freight demand fell further -- especially in the company’s core retail delivery business.

The company earned $6.8 million, or 10 cents per share, compared with $8.4 million, or 12 cents per share, a year earlier.

Revenue sank to $394.5 million, a 23 percent decline from $512.8 million in 2008.

Analysts polled by Thomson Reuters expected a profit of 9 cents per share on revenue of $445.5 million.

“The already soft freight market weakened further during first quarter 2009,” the company said in a statement. “The recessionary economy combined with many shippers aggressively reducing their inventories caused a severe slowdown in freight shipments, particularly in the retail sector which is the company’s largest industry vertical.”

In response to these conditions, Werner cut its truck fleet by 4 percent, or 325 vehicles. It also implemented a number of other cost-cutting measures to balance sinking demand.

Werner said it believes the weak freight market, combined with tight credit and financial markets, are making it increasingly difficult for debt-burdened trucking companies to survive.

It said it expects that more fleet scale-backs and bankruptcies across the industry will put supply and demand more into balance over the next few quarters.

Werner’s shares rose 97 cents, or 6.2 percent, to close Thursday at $16.74.

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.