Werner Enterprises Warns Cost Headwinds Will Persist Into Q1 Despite Freight Recovery

Werner Enterprises (NASDAQ: WERN) said cost headwinds from elevated diesel fuel, driver recruitment and insurance claims will likely limit margin progress over the next two quarters, tempering its path to double-digit truckload margins even as freight demand recovers. The carrier reported third-quarter adjusted EPS of 16 cents, in line with its earlier profit warning, on consolidated revenue of $951 million — up 23% year over year and at the top of management's revised $946 million-to-$951 million outlook. The gain was driven largely by higher fuel surcharges and the January acquisition of dedicated carrier FirstFleet. Werner guided to only "modest sequential" EPS improvement in the fourth quarter, materially below the 38-cent consensus estimate. Management said roughly a third of an 18-cent third-quarter EPS drag stemmed from driver recruiting and sign-on bonuses rather than structural labor inflation, with the remaining 12 cents tied to fuel and insurance claims expected to largely dissipate in the fourth quarter. Lower asset-sale gains and higher interest expense remain additional headwinds.