Landstar’s Q3 net income drops 7.8%

Jacksonville, Fla.-based Landstar System, Inc. posted a net income of $36.3 million on revenues of $788 million for the third quarter of 2016, year-over-year declines of 7.8 percent and 6.4 percent, respectively.    Landstar System, Inc., an asset-light provider of integrated transportation management solutions, posted a net income of $36.3 million for the third quarter of 2016, a 7.8 percent decline from the third quarter of 2015.
   Diluted earnings per share (EPS) for the quarter totaled $0.86 per diluted share, a decline from the $0.90 per diluted share for last year’s third quarter.
   Landstar’s revenues fell 6.4 percent year-over-year to $788 million. However, Landstar President and CEO Jim Gattoni said last year’s third quarter revenues included $35 million from a project on behalf of a customer in the automotive sector.
   Overall, 93 percent of the company’s revenues for the quarter came from truck transportation revenues hauled by independent capacity owners and truck brokerage carriers.
   Gross profits (defined as revenue less the cost of purchased transportation and commissions to agents) for the quarter reached $121.8 million, a year-over-year decline of 3.9 percent.
   During the quarter, the top five industries Landstar served (as a percentage of revenues) were miscellaneous industries at 22.9 percent, followed by consumer durables at 20.8 percent, machinery at 14.6 percent, building products at 9 percent and automotive at 8.9 percent.
   Landstar said Wednesday its board of directors declared a quarterly dividend of $0.09 per share payable on Dec. 2 to stockholders on record as of the close of business on Nov. 8. It is currently the intention of Landstar’s board to pay dividends on a quarterly basis going forward, the company said.
   Approximately 1.04 million shares of Landstar’s common stock are currently available for purchase under the company’s authorized share purchase program. As of Sept. 24, the company had $227 million in cash and short term investments, and $214 million available for borrowings under its senior credit facility.
   Looking ahead into the fourth quarter, Gattoni said, “I expect the slow growth environment we have experienced during the first three quarters of 2016 to continue through the 2016 fourth quarter.
   “I expect 2016 fourth quarter revenue to be in a range of $800 million to $850 million,” he added. “Assuming insurance and claims costs in the 2016 fourth quarter are approximately 3.2 percent of BCO revenue, representing average insurance and claims costs as a percent of BCO revenue over the past 5 years, I would expect diluted earnings per share to be in a range of $0.85 to $0.90 in the 2016 fourth quarter.”
   Meanwhile, the investment bank and analyst Stifel said its 2016, 2017 and 2018 EPS estimates for Landstar have increased from $3.10, $3.40 and $3.70, respectively, to $3.19, $3.45 and $3.80.