Landstar Records Q2 Earnings Drop but Beats Expectations
[Stay on top of transportation news: Get TTNews in your inbox.]
The Jacksonville, Fla.-based company posted net income of $66.6 million, or $1.85 a diluted share, for the three months ending June 30. That compared with $112.5 million, or $3.05, the previous year. Total revenue decreased by 30.4% to $1.37 billion from $1.98 billion.
“Landstar’s business model performed well in the 2023 second quarter considering the challenging freight environment,” said Landstar CEO Jim Gattoni. “After a record-setting 2022, we entered 2023 knowing we would face very difficult year-over-year comparisons, especially during the first two fiscal quarters.
On top of these tough comparisons and contrary to typical seasonal patterns common to the freight transportation industry, the domestic freight environment softened sequentially from the 2023 first fiscal quarter to the 2023 second fiscal quarter.”
Still, the results beat expectations by investment analysts on Wall Street, which had been expecting EPS of $1.80 and quarterly revenue of $1.34 billion, according to Zacks Consensus Estimate.
Landstar said Q2 truck transportation revenue hauled by its network of independent business capacity owners and truck brokerage carriers decreased 28.6% to $1.25 billion from $1.75 billion during the same time last year. The segment includes truckload operations such as van equipment as well as unsided/platform equipment. It also includes less-than-truckload and other truck transportation operations.
“On a sequential basis compared to the 2023 first quarter, we estimate that truckload volumes in the 2023 second quarter underperformed seasonal historical patterns experienced during pre-pandemic periods by 9%,” Gattoni said. “The atypical sequential decrease in demand for truckload services also caused additional downward pressure on rates, especially in the spot market where the company primarily operates.”
Gattoni said these factors contributed to a 15% year-over-year decrease in revenue per load on loads hauled via truck, and he expects the downward momentum to continue.
How effective have third-party services proved to be for fleets? Let's find out with Michael Precia of Fleetworthy Solutions and Dan Rutherford with Summit Virtual CFO by Anders. Tune in above or by going to RoadSigns.ttnews.com.
“Through the first several weeks of July, the number of loads hauled via truck has trended below historical, pre-pandemic second quarter to the beginning of third quarter sequential patterns, while truck revenue per load has thus far trended slightly below these historical, pre-pandemic sequential patterns,” Gattoni said. “Assuming that these trends continue, I expect revenue per load on loads hauled via truck to be in a range of 10% to 12% below the 2022 third quarter and the number of loads hauled via truck to be in a range of 16% to 18% below the 2022 third quarter.”
Truckload transportation revenue hauled via van equipment in Q2 decreased 31.5% to $703.0 million from $1.026 billion. Truckload transportation revenue hauled via unsided/platform equipment decreased 16.8% to $394.8 million from $474.3 million. Revenue from other truck transportation, which is largely related to power-only services, decreased 43.6% to $118 million from $209.1 million.
Want more news? Listen to today's daily briefing above or go here for more info
The rail intermodal segment reported that Q2 revenue fell 41.9% to $25.2 million from $43.4 million during the prior year. The number of loads decreased 34.2% to 7,630 from 11,590. Revenue per load decreased 11.7% to $3,307 from $3,747.
The ocean and air cargo carriers segment reported a Q2 revenue drop of 52.5% to $75.4 million from $158.8 million. The number of loads hauled by the segment decreased 26.7% to 8,310 from 11,330. Revenue per load decreased 35.2% to 9,078 from 14,020.
Landstar ranks No. 6 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 19 on the TT Top 100 list of the largest logistics companies.