Landstar reports 2021 ‘exceeded even our highest expectations’

Landstar reports 2021 ‘exceeded even our highest expectations’ (Courtesy of the Jacksonville Business Journal) — The self-described pessimist who leads Landstar System, Inc. was relegated to noting the company’s performance for its 2021 fiscal year “exceeded even our highest expectations,” Thursday morning.

Landstar (NASDAQ: LSTR) reported $6.57 billion in revenues last year, a 59% increase over 2020. Its earnings per share for the year doubled to $9.98. Not only did volumes increase by more than 23% to 2.52 million loads, Landstar’s revenue per load increased 29% over 2020 to $2.51 million.

President and CEO Jim Gattoni told investors Thursday morning it would have been an understatement to say 2021 was an outstanding year for the company.

“The year started with record first quarter financial results, and each quarter grew from there,” Gattoni said. “In fact, each quarter of 2021 set a new all-time Landstar record for revenue and earnings per share for that quarterly period.”

The fourth quarter was more of the same. In the final three months of the year, Landstar’s $1.94 billion in revenue was a 50% increase from its record-setting revenues and earnings per share that were reached in 2020. In the fourth quarter, Landstar recorded $2.99 earnings per share.

Landstar’s revenue, earnings per share and its operating income of $148.71 million were all quarterly records.

Consumer durables was responsible for 32.3% of Landstar’s fourth quarter transportation revenues, an uptick from the 28% of transportation revenues in 2020. Machinery and building products saw declines in the percentage of revenue. All three lines were far superior to 2020 revenues produced. Consumer durables and building products also witnessed sequential growth.

The peak in truck pricing that Gattoni presumed would happen in 2021 never came. December’s revenue per load hauled via truck was the highest in company history.

“Although it is way too early to predict operating conditions for fiscal (year) 2022, operating conditions that led to our record-breaking year have, so far, carried through the first few weeks of January,” Gattoni said.

He expects this year’s first quarter to continue that pattern, projecting between $1.7 to $1.75 billion in revenues, a more than 32% uptick from 2021. Nevertheless, Gattoni projected the revenue per load for freight hauled via truck to be either flat or down as much as 3%, compared to the 2021 fourth quarter.

As rapidly as Landstar is making money, the company plans to continue to invest it in its operation.

Chief Financial Officer Fred Pensotti said the company has three million shares available for purchase. He stressed that while Landstar returned $235 million to its shareholders last year — $112 million in dividends and $123 million in share repurchases — the company is bigger than it was as recently as 18 months ago and will continue to invest in its systems and process.

“Returning capital is important, but investing in our business is just as, if not more important for the long-term health of our company,” Pensotti said Thursday. “These investments relate to our people, our agents and our capacity, which we refer to collectively as our network.”