(Courtesy of the Jacksonville Business Journal) — A strong third quarter has positioned Jacksonville-based Landstar System Inc. to end an unprecedented year on a high note, with the company projecting fourth-quarter revenue to increase.
The company’s earnings of $1.61 per diluted share for the quarter closing Sept. 26 was the second best in company history behind 2018, an increase of 19% from 2019. Revenue was $1.08 billion, a 7% increase, while gross profit was up 5% to $160.9 million.
“Landstar entered the 2020 third quarter facing one of the most unpredictable and challenging freight environments in the company’s history,” CEO Jim B. Gattoni said in a call with analysts. “The dramatic swing in demand from the sudden significant decrease in mid-March to the bottoming out in April and May to the gradual sequential improvements we experienced through the summer months and continuing through the end of September was unlike any other period in the history of the company.”
In the second quarter, the Covid-19 pandemic struck Landstar hard, with loads hauled via truck declining 16% and revenue down 7% compared to the same period in 2019.
By mid-summer, though, restrictions lifted to the point Landstar and other trucking companies could return to the road in full capacity. In the first week of August, the company’s volume and revenue per load were both above where they had been in the corresponding period a year ago.
Those numbers kept on rising, with the company’s earnings eventually surpassing both the guidance given last quarter and the update in September.
“The achievement of both revenue and diluted earnings per share in excess of our updated guidance was primarily the result of the further sequential increases in the number of loads and revenue per load on loads hauled via truck from September 9th through the end of the fiscal month,” Gattoni said in a statement.
That level of demand has continued in October, the CEO told analysts, and is expected to keep growing, with revenue for Q4 expected to be in the range of $1.15 billion to $1.2 billion.
“We expect that demand — level of demand for our service to continue through the fourth quarter,” he said on the call. “Assuming that level of demand continues, we expect 2020 fourth quarter revenue to look similar to and potentially exceed our record 2018 fourth quarter revenue.”
The number of truck brokers the company is contracting with is at an all-time high for the company, with its 73,293 total truck capacity providers exceeding the 66,685 it had a year ago.
Photo courtesy of Landstar.