Werner Enterprises, Omaha, Neb., saw revenues fall in the fourth quarter and in 2008 compared to the previous year.


Revenues decreased 7 percent to $490.6 million in fourth quarter 2008 compared to $525.7 million in fourth quarter 2007. Excluding fuel surcharges, revenues fell 5 percent to $414.2 million in the fourth quarter compared to $435 million a year earlier.

Earnings per share increased 20 percent to 26 cents per share in fourth quarter 2008 compared to 22 cents per share in fourth quarter 2007. Fourth quarter 2007 earnings per share included a 6-cent-per-share charge for the anticipated settlement of an income tax matter.

For the full year, revenues increased 5 percent to $2.17 billion in 2008 compared to $2.07 billion in 2007. Excluding fuel surcharges, revenues fell 3 percent to $1.72 billion in 2008 compared to $1.77 billion in 2007. Earnings per share declined 7 percent to 94 cents per share in 2008 compared to $1.02 per share in 2007.

The overall freight market became increasingly challenging as each month progressed from mid-September to December 2008. A very weak retail environment combined with extremely soft housing and manufacturing markets resulted in fewer available shipments. This was especially heightened in the truckload market and caused increased price competition for freight in the spot market as carriers competed for loads to keep their trucks productive. Freight rates were also lower in the spot market due to the increased competition for freight and because the decline in fuel prices resulted in lower freight rates from third party brokerage companies and for Werner's Value Added Services ("VAS") segment where the fuel surcharge is included in the base rate. As fourth quarter 2008 progressed, Werner was able to reduce its reliance on third party brokerage freight in this difficult freight market by reducing its fleet, as described below, and increasing non-committed freight from its VAS segment.

In the truckload segment, Werner reduced the size of its Van medium-to-long-haul fleet in fourth quarter 2008 by 500 trucks, partially offset by an increase in trucks in its Regional and Expedited fleets. This helped reduce Werner's exposure to the longer haul market, which remains the most difficult of the truckload markets.

In January 2009, Werner has reduced the Van fleet by an additional 150 trucks. Since March 2007, Werner has reduced the Van fleet from 3,000 trucks to about 1,350 trucks in January 2009. In addition, management took several proactive steps during fourth quarter 2008 to reduce a variety of controllable costs.

The ongoing diversification of the company's service offerings from the Van fleet to Dedicated, Regional, Expedited, and North America cross-border in the Truckload Transportation Services (Truckload) segment and Freight Management, Intermodal, Brokerage and Werner Global Logistics international in the VAS segment helped to partially offset the impact of a very weak freight market in fourth quarter 2008. Customer response to these growing service offerings continues to be very positive.