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Landstar System Inc. saw fourth quarter and 2019 earnings and revenue fall as the company dealt with sluggish trucking conditions and difficult comparisons with record 2018 financial results.
The Jacksonville, Fla.-based motor carrier warned that a traffic collision involving a contractor for a subsidiary will pull down first-quarter earnings. 2019 earnings also were hurt by insurance and claims costs from a fatal collision.
Landstar earned net income of $50 million in the first quarter, a 26.8% decline compared with $68.3 million in the same period a year earlier. The company posted $1.27 in diluted earnings per share compared with $1.68 a year earlier.
Revenue fell 15.7% to $994.9 million from $1.18 billion.
For the year, Landstar profits fell 10.8% to $227.7 million from $255.3 million. The company posted $5.72 diluted earnings per share compared with $6.18 in the prior year.
Revenue dropped 11.5% to $4.1 billion from $4.6 billion in 2018.
“Soft demand, driven by slowing production in the U.S. manufacturing sector, and more readily available truck capacity drove Landstar’s truck rates and volumes below prior-year levels in the 2019 fourth quarter,” Landstar CEO Jim Gattoni said in a Jan. 29 news release.
The company experienced a 9% decrease in revenue per load on loads hauled via truck and a 7% decrease in truck loadings, he said.
Despite the lower financial performance, Gattoni said that Landstar’s 2019 still was the second-best financial year for the company, trailing 2018.
However, January was sluggish, hampered by weakness in the U.S. manufacturing sector and readily available truck capacity, he said.
The weak trucking environment continued into January, Gattoni said.
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Also in January, a truck driven by a contractor was involved in a fatal collision.
“The company is still in the process of obtaining all the facts concerning this incident and, as such, it is too soon to estimate the ultimate financial exposure of this tragic accident,” Gattoni said. “Current facts as known to us indicate that it is probable this accident will adversely impact the financial results of the company’s 2020 first quarter.”
Excluding the cost of that incident, Landstar expects first-quarter diluted earnings per share to be in a range of $1.10 to $1.20.
Landstar ranks No. 8 on the 2019 Transport Topics Top 100 list of the largest for-hire carriers in North America.
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