Werner Enterprises Warns Third-Quarter Profit Will Trail Wall Street Estimates

Werner Enterprises, one of the largest publicly traded truckload carriers in the United States, told investors late Monday that its third-quarter profit will come in well below Wall Street's expectations, as a jump in diesel prices, heavier spending to recruit and retain drivers, and an adjustment to reserves for old insurance claims combined to erase much of the earnings growth analysts had been counting on. The Omaha-based company disclosed the preliminary, unaudited figures in a filing with the Securities and Exchange Commission, ahead of its full results due later this month.

Revenue up, profit squeezed

Werner said it now expects total revenue of about $946 million to $951 million for the quarter ended September 30, up from the $933.9 million it reported for the second quarter. But profitability did not keep pace. The company projected GAAP diluted earnings per share of roughly 10 to 11 cents and non-GAAP adjusted diluted earnings per share of 15 to 16 cents, a non-GAAP figure that trade publication FreightWaves reported was well below the 36-cent consensus analysts had penciled in. Revenue, by contrast, landed only slightly under the Street's $953.6 million estimate, FreightWaves said, underscoring that the shortfall was a cost problem, not a demand problem.

The company attributed the gap to roughly 18 cents per share of cumulative cost headwinds compared with the second quarter of 2026, driven by three factors: a sharp rise in fuel prices, continued investment in driver recruitment and retention, and what it described as a late-quarter adjustment to insurance reserves tied to claims from past periods. The filing did not break out how much of the 18-cent hit came from each source, and Werner said it would provide more detail when it reports full results.

A costly quarter for diesel

Diesel was a known pressure point entering the quarter. Retail diesel prices rose sequentially in nine of the thirteen weeks that made up the third quarter, according to FreightWaves, which cited government fuel-price data showing prices roughly flat to slightly lower in July before climbing about 10 percent in August and another 15 percent in September. Trucking companies typically pass fuel costs through to customers via surcharges, but those surcharges reset on roughly a one-week lag, meaning a fast-rising diesel market squeezes carriers' margins before the surcharge catches up, a dynamic FreightWaves noted should reverse into a tailwind once prices stabilize or fall.

The insurance-reserve adjustment is a reminder that trucking remains a litigation-exposed business: large nuclear jury verdicts and rising claims costs have been a persistent drag on carrier earnings industrywide for several years, forcing companies periodically to true up reserves for claims from accidents that occurred in earlier periods.

Not the only carrier feeling the squeeze

Werner is not alone. Rival J.B. Hunt Transport Services warned investors in mid-September that its own third-quarter earnings per share would fall 5 to 10 percent sequentially, citing roughly $25 million in driver-related costs, more than $10 million from the rapid rise in fuel prices, and an unquantified increase in insurance-claims costs, a nearly identical trio of pressures to the ones Werner cited a month later. J.B. Hunt shares fell about 13 percent the day of that warning. When the Arkansas-based carrier actually reported its third-quarter results in mid-October, revenue of $3.68 billion and earnings of $1.82 a share came in slightly ahead of the already-lowered forecasts, even though the real cost impact, more than $50 million, turned out to be larger than the company's original estimate.

FreightWaves framed the pattern as evidence that cost inflation, not falling freight demand, is now the central story for truckload carriers. The publication's SONAR market data shows trucking capacity has not returned the way it has in past cycles, tender rejection rates remain elevated and contract rates for dry van freight are rising for the first time in nearly four years, a shift carriers have welcomed after a prolonged downturn, but one that, so far, higher fuel, labor and insurance costs have outrun.

A quarter after the growth story

The preliminary warning is a sharp change in tone from where Werner stood three months ago. In its second-quarter earnings release on July 28, the company reported revenue up 24 percent year over year, helped by its January acquisition of FirstFleet, a dedicated-trucking carrier that generated more than $600 million in unaudited 2025 revenue. Adjusted earnings per share nearly tripled from the prior year to 22 cents, and the company raised several pieces of its full-year guidance.

"Werner is well-positioned to drive accelerated earnings power throughout the year," chief executive Derek Leathers said at the time, in comments included in the company's second-quarter release.

Three months later, that "accelerated earnings power" has not shown up in the preliminary numbers: adjusted EPS is now tracking to roughly 15 to 16 cents, down from 22 cents in the second quarter, even as acquisition-fueled revenue growth continued. The contrast illustrates how quickly cost inflation can offset top-line gains in a capital- and labor-intensive business like trucking.

Who feels it

The most direct impact falls on Werner's shareholders and the roughly 14,500 people the company says it employs, including the drivers at the center of the cost pressures the company cited. Investors reacted cautiously: FreightWaves reported that WERN shares were down 1.1 percent at 10:21 a.m. Eastern on Monday, even as the S&P 500 rose 0.7 percent, and noted the stock remains about 31 percent below its mid-July peak. Beyond Wall Street, the warning is a data point for the retailers, food and beverage companies and other shippers that rely on truckload capacity: Werner has said demand from its discount-retail and food-and-beverage customers was flat quarter over quarter heading into the period, suggesting freight volumes themselves were not the problem.

What happens next

Werner said it would provide additional detail when it reports full third-quarter results on October 27, after markets close, followed by a conference call at 4 p.m. Central time. That report should clarify how much of the 18-cent cost headwind came from fuel versus driver spending versus the insurance adjustment, and whether management still expects the pricing recovery it described earlier this year, including guidance for 10 to 13 percent growth in one-way revenue per mile, to offset costs in the fourth quarter. Investors will also be watching J.B. Hunt's experience as a guide: its own warning proved conservative once actual results arrived, raising the question of whether Werner's preliminary range will hold up, or whether, as management has periodically argued this year, cost pressures tied to fuel and insurance claims prove temporary as the freight market's long-delayed recovery continues to take hold.