Landstar System Inc. lowered its first-quarter earnings outlook by as much as 5 cents per share due to higher than expected insurance costs and lower than forecast revenue.
The Jacksonville, Florida-based carrier’s Securities and Exchange Commission filing said earnings would be in a range of 66 cents to 70 cents per share, down from its previous outlook of 70 cents to 75 cents per share. The average estimate compiled by Bloomberg News was 72 cents per share at the time of the announcement March 29.
The revenue outlook was lowered to $705 million to $725 million, below the earlier forecast of $720 million to $770 million, which bracketed the average estimate of $742 million.
Insurance costs will cut earnings by 3 cents to 5 cents per share because of the severity of several accidents, the company’s statement said, while noting that final costs from the wrecks is uncertain at this time.
On the positive side, loads hauled by truck were 4% higher overall, due to increased van freight shipments. Flatbed freight was little changed. Rates were 10% below the first eight weeks of last year on van freight and 12% less in that period for flatbed freight at the carrier that ranks No. 10 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
For the full quarter, revenue per load is expected to be “below that experienced in the 2015 first quarter in an upper-single-digit to low-double digit percentage range.”
“We continue to drive year-over-year volume growth on van equipment,” Landstar CEO Jim Gattoni said. “I am also pleased to see volumes on unsided/platform equipment equal to prior year given a very soft unsided/platform demand environment. On the pricing side, however, lower than previously anticipated revenue per load in both van and unsided/platform services has continued into the first few weeks of March.”