JACKSONVILLE, Fla. — Landstar System Inc. has announced that its basic and diluted earnings per share (EPS) totaled $1.71 on revenue of $1.289 billion during the third quarter this year, according to a news release.
Last year, the company reported an EPS of $2.76 on revenue of $1.816 billion during the third quarter.
“The soft freight market fundamentals experienced during the 2023 second quarter continued throughout the 2023 third quarter and made for challenging comparisons against our record 2022 third quarter performance,” said Landstar President and Chief Executive Officer Jim Gattoni.
Gattoni continued, “Lackluster demand, driven by continued weakness in the U.S. manufacturing sector and the ongoing impact of an inflation-challenged consumer goods sector, plus the continuation of a loose truck capacity market drove Landstar’s truck revenue per load and volumes in the 2023 third quarter below prior-year levels. The number of loads hauled via truck declined 16% as compared to the 2022 third quarter, at the high end of the company’s guidance included as part of the company’s 2023 second-quarter earnings release on July 26, 2023, while truck revenue per load declined 12% as compared to the 2022 third quarter, at the low end of the company’s previously issued guidance.”
Landstar’s gross profit was $128.1 million, and variable contribution was $187.4 million — both in the 2023 third quarter.
In the previous year, the company’s gross profit was $185.7 million, and variable contribution was $245.7 million. $57.6 million and $58.3 million are the differences between 2022 and 2023 third-quarter results.
Trailing the 12-month return on average shareholders’ equity was 32%, and the return on invested capital, representing net income divided by the sum of average equity plus average debt, was 29%.
The company is currently authorized to purchase up to 2,910,339 shares of company’s common stock under its previously announced share purchase programs. Landstar announced that its Board of Directors has declared a quarterly dividend of $0.33 per share payable on Dec. 1, 2023, to stockholders of record as of the close of business on Nov. 7, 2023. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.
“The company’s balance sheet continues to be very strong, with cash and short-term investments of approximately $497 million as of Sept. 30, 2023,” Gattoni said. “Cash flow from operations was $304 million through the first three quarters of fiscal year 2023.”
Truck transportation revenue hauled by independent business capacity owners (BCOs) and truck brokerage carriers in the 2023 third quarter was $1,173.8 million, or 91% of revenue, compared to $1,598.8 million, or 88% of revenue, in the 2022 third quarter.
Truckload transportation revenue hauled via van equipment in the 2023 third quarter was $665.6 million, compared to $914.2 million in the 2022 third quarter.
Truckload transportation revenue hauled via unsided/platform equipment in the 2023 third quarter was $378.1 million, compared to $453.9 million in the 2022 third quarter.
Revenue from other truck transportation, which is largely related to power-only services, in the 2023 third quarter was $102.0 million, compared to $195.3 million in the 2022 third quarter. Revenue hauled by rail, air and ocean cargo carriers was $88.9 million, or 7% of revenue, in the 2023 third quarter, compared to $191.9 million, or 11% of revenue, in the 2022 third quarter.
“Through the first several weeks of October, the number of loads hauled via truck has trended below the historical, pre-pandemic end of third quarter to the beginning of fourth quarter sequential patterns, while truck revenue per load has thus far trended reasonably in line with these historical, pre-pandemic sequential patterns. As a reminder, the 2022 fourth quarter included 14 weeks of operations, while the 2023 fourth quarter will include 13 weeks,” Gattoni said.
Gattoni added that “taking the extra week in 2022 into consideration and assuming a continuation of the October trends coupled with our expectation of a muted peak season, I expect revenue per load on loads hauled via truck to be in a range of 6% to 8% below the 2022 fourth quarter and the number of loads hauled via truck to be in a range of 20% to 22% below the 2022 fourth quarter. As such, I anticipate revenue for the 2023 fourth quarter to be in a range of $1.225 billion to $1.275 billion.”
Gattoni said that based on the range of revenue estimated for the 2023 fourth quarter, “I would anticipate EPS to be in a range of $1.60 to $1.70. The anticipated range of EPS for the 2023 fourth quarter includes estimated insurance and claims costs of approximately 5.5% of BCO revenue. These costs were 5.6% of BCO revenue over the first nine months of 2023. The anticipated range of EPS for the 2023 fourth quarter also reflects an estimated effective income tax rate of 24.5%.”
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