Landstar Q3 Profits, Revenue Slide in 'Challenging' Quarter
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Profit and revenue at Landstar System fell year over year in the third quarter on the back of ongoing weakness in the truckload market.
Executives at the Jacksonville, Fla.-based company expect that market softness to continue into the final three months of the year, telling analysts during the company’s quarterly earnings call Oct. 29 they expect a muted peak season.
Landstar posted a Q3 profit of $50.03 million, down 18.9% compared with $61.65 million a year earlier. The carrier posted diluted earnings per share of $1.41 in Q3, down from $1.71 in the year-ago period.
Landstar ranks No. 10 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. The company ranks No. 2 in the flatbed segment of the market, No. 3 among truckload carriers and No. 15 among intermodal and drayage players. It also ranks No. 26 on the TT Top 100 logistics companies list.
“Consistent with the first half of 2024, the freight environment during the third quarter remained challenging,” CEO Frank Lonegro said in a statement accompanying the results.
Even so, Landstar fell short of analyst expectations. R.W. Baird analysts Garrett Holland and Joseph Higgins said the company’s Q3 EPS missed their $1.43 estimate and the $1.45 consensus, while noting it was within a wide guidance range of $1.35 to $1.55.
Revenue totaled $1.214 billion in Q3, a decrease of 5.8% compared with $1.289 billion in the same period 12 months earlier.
Truckload revenue in the most recent quarter totaled $1.091 billion, or 90% of revenue, compared with $1.174 billion, or 91% of revenue, in the year-ago quarter.
Landstar Q3 2024 earnings report
The company’s dry van revenue totaled $604 million, compared with $666 million a year earlier.
Revenue from the company’s flatbed operations in Q3 dipped to $370 million from $378 million in the year-ago period.
Lonegro saw bright spots though.
“I was encouraged that Landstar achieved a 3.2% sequential increase in truck revenue per load compared to the [second quarter of 2024], outperforming typical seasonality,” he said. “This result was driven by a strong month-over-month truck revenue per load increase in July, but tapered off as we moved through August and September, in part due to tougher prior month comparisons.”
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Landstar’s number of loads hauled by truck declined 7.7% to 485,750 from 526,370, slightly ahead of the midpoint of company guidance. Dry van loads fell 7.7% to 287,922 in Q3 from 311,831 in the same period 12 months earlier. Flatbed loads decreased 6.4% to 118,200 in the most recent quarter from 126,286 a year earlier.
“The freight environment in [Q3] continued to be characterized by soft demand and readily available truck capacity. Accumulated inflation on goods continued to impact the amount of truckload freight generated in relation to consumer spending,” Lonegro told analysts during the call.
“Industrial output was soft throughout the quarter, as evidenced by year-over-year declines in manufacturing, with [Institute for Supply Management’s manufacturing purchasing managers index] fluctuating in the mid-40s,” he said, “Truck capacity continued to be readily available, with only small pockets of supply-demand equilibrium, and market conditions continue to favor the shipper.”
Looking forward, Landstar expects the fourth quarter will see truckload volumes in a range of 4% lower to 1% higher than in the year-ago period, and that truck revenue per load will range from flat year on year to 4% higher.
“We do not anticipate our typical seasonal improvement into November and December, based on the expectation of a reasonably muted peak season as compared to historical fourth quarters,” said Lonegro.
Landstar expects Q4 EPS of $1.25 to $1.45 and revenue of between $1.150 billion and $1.250 billion.
Baird’s Holland and Higgins said the outlook reflected lingering industry pressure on demand, while adding that the company’s business model was well-positioned to capitalize on an inflection in spot market rates.
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