Freight broker Landstar System’s fourth quarter was largely as expected, but its outlook for the primary quarter was well below analysts’ expectations.
Landstar (NASDAQ: LSTR) reported fourth-quarter earnings per share of $1.62 Wednesday after the market closed. The result was in step with the consensus estimate but nearly $1 lower yr over yr (y/y). The corporate closes its books on the last Saturday of the yr, which resulted in an additional operating week within the year-ago quarter.
Total revenue of $1.2 billon was 28% lower y/y and worse than management’s guidance. Landstar said the additional week equated to $65 million in revenue last yr.
Total loads hauled by trucks were down 22% y/y within the quarter but in step with guidance. Revenue per load was down 9.6%, 260 basis points worse than the midpoint of management’s guidance range.
“The continuation of sentimental demand, driven by continued weakness within the U.S. manufacturing sector and a weaker than typical peak season, plus the continuation of a loose truck capability market drove Landstar’s truck revenue per load and volumes within the 2023 fourth quarter below prior yr levels,” Jim Gattoni, president and CEO, stated in a news release.
The corporate is seeing the traditional seasonal sequential step-down in demand to this point in 2024.
Landstar expects revenue for the primary quarter to be in a spread of $1.1 billion to $1.15 billion, a 22% y/y decline on the midpoint of the range. Loads hauled by truck are expected to say no between 14% and 16%, with revenue per load down by 8% to 10%. The corporate is asking for first-quarter EPS of $1.25 to $1.35, well wanting the $1.63 estimate on the time of the print.
Variable contribution, or revenue less purchased transportation and commissions, fell 24% y/y to $178 million. The contribution margin improved 80 bps to 14.8% as purchased transportation expenses as a percentage of revenue declined modestly.
The corporate generated $394 million in money flow from operations in 2023, a 37% y/y decline.
Landstar will host a call on Thursday at 8 a.m. EST to debate fourth-quarter results with analysts.
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