Landstar Q2 2020 Earnings Report
Key Takeaways
Landstar System, Inc. reported a decrease in revenue to $824 million and diluted earnings per share of $0.63 for the second quarter of 2020, compared to $1.045 billion and $1.53, respectively, for the same period in 2019. The results were impacted by the COVID-19 pandemic and included $12.6 million in pandemic relief incentive payments to BCOs and agents, a $2.6 million charge for asset impairment in Mexico, and $2.3 million in higher insurance premiums.
Revenue for Q2 2020 was $824 million, a decrease from $1.045 billion in Q2 2019.
Diluted earnings per share for Q2 2020 were $0.63, down from $1.53 in Q2 2019.
Gross profit for Q2 2020 was $113.1 million, compared to $158.0 million in Q2 2019, impacted by pandemic relief payments.
The number of loads and revenue per load on loads hauled via truck in the 2020 second quarter decreased 16 percent and 7 percent, respectively, from the 2019 second quarter.
Landstar
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Landstar Revenue by Segment
Forward Guidance
Landstar anticipates Q3 2020 revenue to be in the range of $885 million to $935 million and diluted earnings per share to be in the range of $1.11 to $1.17 per share, assuming current demand and capacity conditions persist and insurance and claims expense at 4.8% of BCO revenue.
Positive Outlook
- The number of loads and revenue per load on loads hauled via truck have moved beyond the peak declines of April and May.
- Pricing conditions for truck services in the 2020 third quarter will be slightly improved as compared to the 2020 second quarter.
- There will be little change in the level of truck capacity available in the marketplace.
- Landstar remains in a solid operational and financial position as we enter the third quarter.
- It is currently the intention of the Board to pay dividends on a quarterly basis going forward.
Challenges Ahead
- The ultimate impact that the coronavirus pandemic will have on the freight transportation industry continues to be unpredictable.
- The number of loads hauled via truck in the 2020 third quarter to be below the number of loads hauled by truck in the 2019 third quarter in a mid single-digit percentage range.
- 2020 third quarter truck revenue per load to be lower than the 2019 third quarter in a mid single-digit percentage range.
- Insurance and claims expense at 4.8 percent of BCO revenue (which reflects the significant increase in insurance premiums previously described).
- Demand for freight services slowed significantly and capacity became readily available during the Company’s 2020 second quarter, especially in the spot market where the Company primarily operates.
Revenue & Expenses
Visualization of income flow from segment revenue to net income