Landstar System Inc., an asset-light trucking company, saw net earnings and revenues in the second quarter of 2018 take a big leap year-over-year amid a tight trucking market and high demand, as well as a significantly lower effective tax rate.
Net income for the quarter stood at $62.5 million, rising 67 percent from last year’s second quarter, while revenues totaled $1.18 billion, surging 36 percent.
Landstar’s effective income tax rate for the quarter was 24.3 percent, down significantly from 37.7 percent for last year’s second quarter, Landstar Vice President and Chief Financial Officer Kevin Stout said on the earnings call Thursday.
The top five industries Landstar served during the quarter, as a percentage of revenue, were consumer durables at 22.8 percent, other/miscellaneous at 21.4 percent, machinery at 14.5 percent, building products at 9.5 percent and AA&E/hazmat at 9 percent, the company said.
Truck transportation revenues hauled by independent business capacity owners and truck brokerage carriers, which includes revenues hauled via van equipment and unsided/platform equipment, made up 93 percent of revenues.
“The number of loads hauled via truck in the 2018 second quarter was an all-time quarterly record and increased 11 percent over the 2017 second quarter, driven by a 13 percent increase in the number of loads hauled via van equipment, an 8 percent increase in the number of loads hauled via unsided/platform equipment and an 8 percent increase in less-than-truckload volume,” Landstar President and CEO Jim Gattoni said in the earnings press release. “The number of loads hauled via railroads, ocean cargo carriers and air cargo carriers was 23 percent higher in the 2018 second quarter compared to the 2017 second quarter, primarily due to a 32 percent increase in rail intermodal volume.”
Landstar said its board of directors declared a quarterly dividend of $0.165 per share, payable on Aug. 31 to stockholders of record as of the close of business on Aug. 13.
During the second quarter, Landstar purchased about 986,000 of the company’s common stock at an aggregate cost of around $104 million. Landstar is currently authorized to purchase up to an additional 2 million shares of the company’s common stock under its previously announced share purchase programs. At the close of the second quarter, Landstar had $189 million in cash and short-term investments and $216 million available for borrowing under its senior credit facility.
In regard to Landstar’s new transportation management system, Gattoni said on the call that about 100 agents are using it and like it, but the process of rolling it out is slow and could take two to three years.
Commenting on the new TMS system, Landstar said in January, “Several Landstar agents are involved in a pilot program transitioning to the new TMS system in stages toward full implementation. This system will increase efficiencies, provide new tools and enhance business processes for agents, customers and capacity providers.”