Landstar Reports Record Revenue, Earnings for Q1
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Landstar System Inc. saw revenue and earnings reach a new record during the first quarter, the company reported April 20.
The Jacksonville, Fla.-based truckload motor carrier posted net income of $124.8 million, or $3.34 a diluted share, for the three months ending March 31. That compared with $77.2 million, or $2.01, during the same time the previous year.
The total revenue increased by 53% to a record $1.971 billion from $1.288 billion.
“Our 2022 first-quarter financial performance was the best ever quarterly performance in Landstar history,” Landstar CEO Jim Gattoni said during a call with investors the next day. “It is highly unusual for a first-quarter financial performance to exceed the financial performance of the immediately preceding fourth quarter. The 2022 first quarter did just that. First-quarter revenue, gross profit, variable contribution, operating income and diluted earnings per share were each all-time quarterly records ahead of even our record 2021 fourth quarter.”
Gross profit during the quarter increased 46% to a record at $214.6 million from $147.1 million during the same time last year. Variable contribution as defined as revenue less the cost of purchased transportation and commissions to agents increased 43% to an all-time high of $270.5 million from $189.2 million.
“Landstar experienced strong growth in both truckload rates and volume along with significantly increased revenue from ocean freight services, largely on rate increases,” Gattoni said. “In only three of the past 10 years prior to 2022 has first-quarter revenue per truckload exceeded that of the preceding fourth quarter. Revenue per load on loads hauled via truck in the 2022 first quarter was an all-time quarterly record and exceeded the 2021 fourth quarter by 4%.”
Gattoni added that the sequential quarter-over-quarter percentage increase in revenue per load on loads hauled via truck for each quarter since the third quarter of 2020 have been above historical trends. But the sequential growth rates slowed from the third quarter into fourth quarter of 2021.
“Our initial guidance for the 2022 first quarter assumed that the deceleration in sequential quarter-to-quarter growth would continue,” Gattoni said. “Therefore, assumed revenue per load on loads hauled via truck would return to a more normal seasonal pattern on a month-to-month basis.”
Landstar would later disclose that truck rates during the first eight weeks of the quarter exceeded the prior period by 27%. Its revenue overall ended up being 13% above the high end of the initial guidance and in line with a later updated guidance.
“That year-over-year increase was due to rate increasing from December to January and from January to February by 3.3% and 2.3%,” Gattoni said. “Those positive sequential trends put February revenue per truckload approximately 3% above December. Far above normal seasonal trends where February rates are always below the prior year’s December. Given the pricing strength Landstar experienced during the first two months of 2022, it wasn’t surprising that truck revenue per load in March was equal to that of February, even after considering the recent spike in fuel costs.”
The results were above expectations by investment analysts on Wall Street, who had been looking for $2.93 per share and quarterly revenue of $1.81 billion, according to Zacks Consensus Estimate.
Landstar noted in the earnings report that prior-year comparisons will become more challenging as the year progresses as a result of its financial performance being unparalleled over the trailing 12 month period. The company also pointed to headwinds relating to inflation, a potential shift in consumer spending and potential impacts relating to the war in Ukraine. This makes it difficult to predict the future direction of the domestic freight transportation environment.
The truck transportation segment revenue hauled by independent business capacity owners and truck brokerage carriers in the quarter increased 47% to $1.75 billion from $1.19 billion during the same time the prior year. Revenue per load on loads hauled via truck increased 22% while the number of loads hauled via truck increased 20%. The segment includes truckload and less-than-truckload operations.
Truckload transportation revenue hauled via van equipment increased 48% to $1.08 billion from $729.4 million.
Truckload transportation revenue hauled via unsided/platform equipment increased 37% to $408.8 million from $297.5 million.
Less-than-truckload revenue increased 31% to $33.7 million from $25.7 million.
Revenue from other truck transportation increased 61% to $227.6 million from $140.9 million.
The rail intermodal segment saw revenue increase 35% to $42.7 million from $31.7 million.
The ocean and air cargo carriers segment reported that revenue increased 219% to $152.1 million from $47.6 million last year. Total revenue hauled by rail, air and ocean cargo carriers in the quarter increased 146% to $194.7 million from $79.3 million.
Landstar ranks No. 9 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 18 on the TT Top 100 list of the largest logistics companies.
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