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Landstar System Inc. said weakening manufacturing activity and softer freight-hauling demand led to smaller profits in the third quarter of 2019.
The Jacksonville, Fla.-based truckload carrier said Q3 net income declined 10.9% to $152.6 million, compared with $171.3 million in the same period last year. Earnings per share were $1.35 in the quarter ended Sept. 30, down 17.1% from $1.63 a year ago.
Landstar System Reports Third Quarter Revenue of $1.012 Billion and Diluted Earnings per Share of $1.35 https://t.co/zwd2FP159A— Landstar System (@LandstarSystem) October 23, 2019
Revenue was $1.012 billion, down 15.8% from $1.202 billion in the comparable period.
“The current macroeconomic environment made for challenging comparisons against our record 2018 third-quarter performance,” said Jim Gattoni, Landstar CEO and president. “Softer demand, driven by slowing production in the U.S. manufacturing sector, and more readily available capacity drove Landstar’s truck rates and volumes below prior year levels in the 2019 third quarter.”
Gattoni said the revenue decrease was mostly due to a 13% decrease in revenue per load, and a 5% decrease in truck loadings.
“While truck revenue per load has been below prior year levels throughout 2019, truck load volumes have more recently slowed with softening demand,” Gattoni said.
The company’s truck segment generated $932.2 million, or 92% of its revenue, compared to $1.118 billion, or 93% of revenue, in 2018, Landstar officials said.
Revenue generated by rail, air and ocean-cargo carriers was $59.3 million, or 6% of revenue, compared to $65.7 million, or 5% of revenue, in the 2018 third quarter.
Gattoni said pricing for truck services was fairly stable on a sequential month-to-month basis during the quarter, continuing a trend that began in the middle of Q2 2019.
“I expect pricing to remain stable through the 2019 fourth quarter given current demand and assuming little change in the level of truck capacity available in the marketplace,” Gattoni said.
Landstar generates the bulk of its revenue from services provided by business capacity owners, who are independent contractors who provide truck capacity under exclusive lease arrangements. The company also brokers freight to other carriers and provides rail intermodal and freight-forwarding services.
Landstar ranks No. 8 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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