Landstar System reported record revenue and profits in the fourth quarter of 2018 and set new “high-water marks” for the number of loads and drivers in 2018, company officials said.
The Jacksonville, Fla.-based trucking and logistics service provider generated net income of $68.3 million, or $1.68 a share, in the three months ended Dec. 31, compared with net income of $64.7 million, or $1.54 a share, in the same period the year prior. Revenue increased 12% to $1.18 billion in the fourth quarter of 2018 from $1.05 billion in 2017.
“Landstar’s financial performance in 2018 was by far the best in the company’s history,” CEO Jim Gattoni said in a statement Jan. 30. “Landstar set many annual financial and operational high-water marks, including revenue, gross profit, operating income, net income, diluted earnings per share, truck loads and year-end truck count provided by business capacity owners.”
For the year, Landstar reported net income of $255.3 million, or $6.18 a share, on revenue of $4.62 billion, compared with net income of $177 million, or $4.21 a share, on revenue of $3.65 billion in 2017.
Landstar generates the bulk of its revenue from services provided by business capacity owners, who are independent contractors that provide truck capacity under exclusive lease arrangements. The company also brokers freight to other carriers and provides rail intermodal and freight forwarding services.
The number of trucks provided by BCOs reached an all-time high of 10,599 at the end of 2018, up from 9,696 at the end of 2017, the company reported.
Combined revenue from BCOs and truck brokerage carriers was $1.08 billion in the fourth quarter versus $967.5 million in the fourth quarter a year ago, while the number of loads increased 4.2% to 519,550 from 498,490.
Gattoni said demand for truckload transportation was strong across all of its service offerings, with loads requiring van equipment generating revenue of $705 million in the fourth quarter of 2018, an increase of 11.1% from $634.4 million in 2017. Loads on unsided or platform equipment generated revenue of $346.6 million, a 12% rise from $309.5 million. Less-than-truckload loads generated revenue of $26.1 million, up 10.3% from $23.6 million. Total truck loads increased 4.2%, to 519,550 in the fourth quarter from 498,490 a year ago.
Rail intermodal generated revenue of $33 million in the fourth quarter of 2018, an increase of 18.3% from $27.8 million in 2017, although the number of loads dropped 1.6% to 12,770 from 12,960.
Ocean and airfreight forwarding generated revenue of $19.9 million, up 24.2% from $16 million, and the number of loads increased 6.2% to 7,720 from 7,270.
Looking ahead, Gattoni said the number of loads transported in the first four weeks of 2019 is ahead of levels seen in 2018.
“I expect loads hauled via truck in the 2019 first quarter to grow in a low-single-digit percentage range over the 2018 first quarter,” Gattoni said.
Unlike a year ago, however, when revenue per load in the first quarter actually exceeded the preceding fourth quarter, an unusual circumstance caused by capacity constraints in the market, Gattoni said he expects a “more normal seasonal trend” with a slight decline in revenue per load on trucks in the first quarter of 2019.
“Assuming the current environment continues throughout the 2019 first quarter,” Gattoni said, “I anticipate revenue to be in a range of $1.025 billion to $1.075 billion [and] diluted earnings per share to be in a range of $1.51 to $1.57.”