Landstar’s second-quarter profits fall on weaker commercial vehicle market

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Landstar System Inc. profit and revenue declined in the second quarter of 2024, primarily due to weakness in the trucking market.

Revenue rose compared with the first three months of the year, marking the first consecutive quarter-over-quarter revenue increase since the second quarter of 2022, although the second quarter is typically a better quarter for carriers than the first.

Landstar reported profit of $99.7 million, or $2.79 per diluted share, in the latest quarter, down 31.1% from $144.8 million, or $4.03, in the same period a year earlier.

Jacksonville, Florida-based Landstar reported revenue of $1.225 billion in the second quarter, down 10.8% from revenue of $1.374 billion in the year-ago period.

Analysts were expecting something better. The consensus analyst expectation for Q2 was $1.26 billion, according to Zacks Equity Research.

Landstar’s revenue from BCOs and brokered truckload carriers combined for the second quarter was $1.106 billion, or 90% of revenue, compared with $1.247 million, or 91% of revenue, in the same period last year, as reported July 30.

Revenue from the dry van business fell 12% to $619 million in the latest quarter from $703 million a year earlier.

The number of truckloads moved fell 8.9% in the latest quarter to 998,670 from 1,121,660 in the second quarter of 2023, which is at the low end of the company’s forecast in its first-quarter results.

Landstar forecasted second-quarter truckload volume would be down 5% to 9% year over year.

Truckload revenue per truckload fell 2.6% to $2,178 in Q2 from $2,292 a year earlier, slightly below the midpoint of the company’s last forecast. The company had expected revenue per truckload to be flat or down 4%.

Dry van rates at the end of July were 11% below the five-year average, and volume was 30% below the five-year average, according to FTR Transportation Intelligence.

“Freight demand was generally subdued in the second quarter of 2024 as the impact of cumulative freight inflation continued to weigh on full truckload volumes relative to consumer spending,” CEO Frank Lonegro said during the company’s quarterly earnings conference call.

“Industrial production was inconsistent throughout the quarter, as evidenced by the (Institute for Supply Management Manufacturing PMI) fluctuating slightly above and below 50. We continue to be in a loose truckload capacity environment by historical standards, and market conditions favor the carrier,” Lonegro said on a July 30 call.

Landstar expects third-quarter truckload volumes to be down 6% to 10% year-over-year, while truckload revenue per load will be flat to 4% higher than the same period last year.

Truckload revenue per load is outpacing pre-pandemic benchmarks in the third quarter, Lonegro said, adding: “That’s why I’m a little reluctant to lean in and say happy days are here again. But I think we’re seeing a little bit of growth on the revenue side.”

For the situation to improve, the company’s top executive said, further GDP growth and a reduction in the number of carriers will be necessary, although uncertainty over the results of the November presidential election is dampening optimism.

Landstar is ranked No. 10 on the Transport Top 100 list of the largest vehicle rental carriers in North America and No. 3 among full truckload carriers.

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