Landstar Reports Record Earnings for Q2

Landstar noted the performance was particularly impressive considering the company already had a record-setting Q1. (Landstar System Inc.)

[Stay on top of transportation news: Get TTNews in your inbox.]

Landstar System reported an all-time record for quarterly net income in its second-quarter financial results.

The Jacksonville, Fla.-based truckload carrier on July 21 posted net income of $92.3 million, or $2.40 per diluted share, for the three months ending June 30. That compared with $24.3 million, 63 cents, during the 2020 period. Total revenue increased 90.7% to $1.57 billion from $824 million.

“Our 2021 second quarter financial performance was by far the best quarterly performance in Landstar’s history,” CEO Jim Gattoni said during a July 22 conference call. “Second-quarter revenue, gross profit, operating income, operating margins and earnings per share were all each an all-time quarterly record.”

Landstar attributed the gains to strong freight demand amid a broad-based economic recovery, pointing specifically to strength in spending for building products and consumer durables, along with small package and e-commerce activity. Gattoni said he expects the company to continue on a record pace this year, and could for the first time surpass $5 billion in annual revenue.

Gattoni

“The number of loads hauled via unsided/platform equipment grew 35% over the 2020 second quarter, mostly due to improvements in the U.S. manufacturing sector beginning in March,” Gattoni said.

He also noted that new hires produced results. “As it relates to the new agent pipeline, we continue to attract qualified agent candidates,” Gattoni said. “Revenue for new agents was $24.3 million in the 2021 second quarter, the highest revenue for new agents in over 12 quarters.” He also noted that the company during Q2 recruited 10% more independent business capacity owners (BCO) that it did during Q2 2020. BCO retention rate also improved compared with the prior-year quarter.

“As for truck capacity, we ended the quarter with a record 11,557 trucks provided by business capacity owners, over 560 more trucks compared to our year-end 2020 count,” he said.

Landstar’s previous all-time quarterly revenue record was achieved in Q4 2020; the Q2 results exceeded it by 21%. Previous all-time quarterly records for gross profit, operating income and EPS were reached in Q1 2021.

Across the company’s segments, Q2 revenue for truck transportation increased 91.7% to $1.444 billion from $753 million. The segment is the company’s largest, accounting for 92% of revenue, and includes truckload and less-than-truckload operations. The division handled 602,940 loads in Q2, compared with 435,430 the prior year. Average revenue per load increased to $2,395 from $1,730.

Truckload revenue in Q2 rose to $970.9 million compared with $483 million a year ago. Truckload revenue hauled via unsided/platform equipment was $444.3 million compared with $247.4 million, while LTL revenue increased to $29.1 million from $22.9 million.

Revenue in Landstar’s rail intermodal segment rose 91.3% to $44.4 million compared with $23.2 million. Ocean and air cargo carriers’ revenue nearly doubled, to $60.2 million from $30.7 million. Revenue from rail, air and ocean cargo carriers represents 7% of the company’s total.

Landstar’s Q2 results surpassed the expectations of Wall Street investment analysts, who were looking for $2.31 EPS on revenue of $1.47 billion, according to Zacks Consensus Estimate.

Gross profit also hit an all-time quarterly record of $220.8 million, compared with $113.1 million in Q2 2020. This is defined as revenue less the cost of purchased transportation and commissions to agents.

While Landstar stressed that year-over-year comparisons are not reliable given the significant adverse impact of the coronavirus pandemic on the economy and its own financial results, it noted that comparing Q2 to the previous quarter does bring context to the strength of the financial performance.

“In reviewing 2021 second-quarter performance, quarter-over-prior-quarter financial comparisons to the 2020 second quarter are not meaningful,” Gattoni said. “This is due to the significant downturn in the 2020 second quarter in demand for freight services and the U.S. economy in general.”

Landstar ranks No. 9 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 22 on the TT Top 50 list of the largest logistics companies.

Want more news? Listen to today's daily briefing below or go here for more info: