Landstar System, a brokerage company, is preparing for a positive turn, citing normal seasonal trends in its first-quarter call. Unlike asset-based operators who are cutting costs, Landstar is not, providing a relief from the grim earnings season.
Although the company exceeded expectations in the first quarter, its guidance for the second quarter fell below consensus. Landstar reported earnings per share of $1.32 for the first quarter of 2024, beating estimates by 4 cents but dropping by 85 cents year over year. This decline was attributed to cost headwinds from variable compensation resets and expenses related to the CEO transition.
Despite a decrease of 18% in consolidated revenue year over year, Landstar’s revenue was above management’s guidance. Total loads hauled by truck were down 13% year over year, and revenue per load decreased by 7%, both slightly better than expected.
The company remains optimistic about demand in industrial-related markets and notes that flatbed metrics are showing less severe declines compared to dry van business. Additionally, Landstar expects truck capacity on its platform to improve as the market and spot rates recover.
While revenue per mile on BCO loads declined year over year, owner-operator productivity increased. The company anticipates a second-quarter revenue decline of 9% at the midpoint, with truck volumes expected to decrease between 5% and 9%.
New CEO Frank Lonegro, who took over in February, expressed confidence in the company’s growth initiatives and technology enhancements. Despite falling short of the consensus estimate for second-quarter EPS, Landstar is focused on supporting its network of small business owners and capitalizing on freight improvements. Lonegro’s leadership, along with the recent addition of new sales roles, positions Landstar for future success.
Shares of LSTR were up 1.3% compared to the S&P 500 on Thursday, signaling a positive outlook for the company.
