Operating revenues increased 6% to $322.6 million compared to $304.6 million in third quarter 2000. Net income increased to $12.5 million compared to $12.3 million in third quarter 2000. Earnings per share for third quarter 2001 were 26 cents per share, equal to the 26 cents per share earned in third quarter 2000.
"I am pleased to report continued improvement of our performance during one of the most challenging times faced by the truckload industry in many years," said Chairman and CEO Clarence (C.L.) Werner. "Werner Enterprises improved its results by exceeding net income and matching earnings per share of a year ago. At the same time, we further strengthened our financial position by becoming essentially debt-free."
Freight demand remained softer during the quarter, compared to the same quarter a year ago. Werner Enterprises added or replaced freight to counter the effects of a slowing economy. While the company experienced a small 1% decrease in our average miles per truck, they improved our empty mile percentage by 4%.
Average diesel fuel prices were 12 cents per gallon lower in third quarter 2001 compared to the very high prices experienced in third quarter 2000. However, Werner notes, even with the recent decrease in fuel prices, prices today are significantly higher than average historical fuel price levels over the past 10 years.
Werner has had fewer problems with high insurance rates than many of its competitors; for more than 10 years, the company has self-insured and managed virtually all of its liability insurance claims with qualified Risk Department professionals. That leaves only catastrophic claims coverage, and when Werner renewed that policy Aug. 1, it increased the company's total insurance and claims expense by less than 10%. Industry sources have reported that other carriers have experienced insurance increases of 50% to 100%.
"Over the past several months, we met with many of our customers to explain our concerns regarding the state of the truckload industry," Werner says. "We explained that truckload returns must improve to justify the continued investment and risk associated with operating premium equipment and providing premium service. We have been making tough decisions regarding the freight we haul and the customers we support with our truck capacity. Many good and loyal customers have supported us during these challenging times. In the short term, we plan to hold our fleet growth until margins improve. There should be opportunities for fleet growth in the future if the economic environment improves or if a significant amount of truckload capacity leaves the marketplace."