Despite record revenues for second quarter, Werner Enterprises’ profits showed the effects of high fuel prices and a weak used truck market.
Operating revenues for the quarter were $307.2 million up 18% from the same period last year, but net income fell from $17.6 million in second quarter 1999 to $12.9 million this year.
“The current operating environment for truckload carriers is challenging,” said Chairman and CEO Clarence Werner.
Fuel prices remained at levels approaching a 10-year high during second quarter. The company said it has made substantial progress in improving the percentage reimbursement from customers for higher fuel costs, but Werner also incurs fuel cost for empty miles, out-of-route miles caused in part by driver home time needs, truck idling, and reimbursements to owner-operators. An oversupply of both new and used trucks drove down prices and reduced the number of used trucks sold.
Werner said they have temporarily slowed fleet growth and are focusing on margin improvement. Despite a slightly softer freight market during the second quarter, the carrier maintained its average miles per tractor and low empty mile percentage. “We have also had success raising our freight rates,” he said.
Operating revenues for the first six months were $598.6 million versus $501.6 million for the same period in 1999. Net income was $23.2 million versus $30.2 million a year ago.