Why Werner Enterprises Shares Went Flat

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of transportation and logistics company Werner Enterprises (Nasdaq: WERN  ) fell as much as 11% earlier in the trading session, following its preliminary third-quarter earnings guidance.

So what: Werner is now forecasting that its third-quarter EPS will be in the range of $0.33-$0.36, versus Wall Street’s projection of $0.44. Werner is blaming the rising cost of salaries, fuel, health-care benefits, maintenance, and depreciation of trucks as the reason for the weak expectations. BB&T Capital also downgraded the company to "hold" from "buy" following its guidance.

Now what: About the only thing we were missing in that list of excuses was the kitchen sink! Swift Transportation (NYSE: SWFT  ) is dealing with similar fuel costs, but it managed to top expectations in the second quarter. Similarly, even Arkansas Best (Nasdaq: ABFS  ) , which is now firmly on my radar, beat expectations, due to increases in its pricing. If some of the weaker transportation companies are succeeding, why isn’t Werner? That's not exactly an answer I have right now, but it’s definitely a reason to be leery of Werner at the moment.

Craving more input? Start by adding Werner Enterprises to your free and personalized Watchlist, so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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  • Report this Comment On September 17, 2012, at 11:30 AM, truckinfools wrote:

    Investing in Truckload Carriers seems ignornant for the long term...they obviously have a huge shortage of qualified drivers...and no remedy in sight? Hello?? sounds like a real winner...I sure want to throw money into that sesspool of stupidity..100% percent annual turnover?? One remedy is to throw Money (from where) to the drivers in hopes they will stay on the job? Yippee.

    I sure see this as a great future. Selling these TL companies SHORT is a better idea. USAK is a huge TL carrier..on the verge of Bankruptcy..who is next?? Werner?? The original founder lives in Hawaii...and has turned the company over to his Children?? Another surefire winner?? Take a LOOK...this industry is no place for anybody but an Imbicile to put money. Where is the Upside potential??? In this propped up "economy" ? I guess these brokers are telling Morons that Truckin companies will be the first to Profit at the Economy booms out of disaster??? How Funny.

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