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Why Werner Enterprises Shares Went Flat

By Sean Williams - Updated Apr 7, 2017 at 1:02PM

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Is this meaningful or just another movement?

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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Stocks Mentioned

ArcBest Corporation Stock Quote
ArcBest Corporation
$88.28 (2.00%) $1.73
Werner Enterprises, Inc. Stock Quote
Werner Enterprises, Inc.
$42.20 (1.47%) $0.61

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