Landstar System Reports Fourth Quarter Revenue of $1.209B and Earnings Per Share of $1.31

Rhea-AI Summary

Landstar System (NASDAQ: LSTR) reported fourth quarter 2024 revenue of $1.209 billion and earnings per share of $1.31, marking the first year-over-year quarterly revenue growth since Q3 2022. The company saw a 3.1% increase in truck revenue per load but experienced a 3.4% decline in truck load volume compared to Q4 2023.

Notable financial metrics include gross profit of $109 million and variable contribution of $167 million. The company maintained a strong balance sheet with $567 million in cash and short-term investments. During fiscal 2024, Landstar returned capital to shareholders through stock buybacks (452,000 shares at $82.1 million) and dividends ($120.5 million). The Board declared a quarterly dividend of $0.36 per share.

Positive

• First year-over-year quarterly revenue growth since Q3 2022
• 3.1% increase in truck revenue per load
• Strong balance sheet with $567 million in cash and short-term investments
• 20% return on average shareholders' equity
• Significant shareholder returns through $82.1M in buybacks and $120.5M in dividends

Negative

• EPS declined from $1.62 in Q4 2023 to $1.31 in Q4 2024
• Gross profit decreased from $124.6M to $109.4M year-over-year
• 3.4% decline in truck load volume
• Elevated insurance and claims costs at 6.7% of BCO revenue vs 4.7% historical average
• Increased cargo claim costs due to fraud and theft

Insights

Financial Analyst

Landstar's Q4 2024 performance reveals concerning trends beneath surface-level growth. While achieving the first year-over-year quarterly revenue growth since Q3 2022 is positive, the 19% decline in EPS signals significant operational challenges.

Three critical factors deserve investor attention:

• Margin Pressure: The decline in variable contribution from $178.1M to $166.5M indicates deteriorating pricing power and operational efficiency.
• Insurance Cost Surge: The 43% increase in insurance costs relative to historical averages (6.7% vs 4.7%) reflects systemic issues in cargo security and liability management, potentially requiring significant operational adjustments.
• Modal Mix Shifts: The 20% growth in rail, air and ocean cargo revenue suggests strategic diversification, though truck transportation's dominance at 89% of revenue maintains exposure to road freight market volatility.

The company's robust balance sheet with $567M in cash/short-term investments and 20% return on equity provides financial flexibility, but elevated insurance costs and margin pressure may constrain future capital returns. The sequential improvement in truck pricing offers a glimmer of hope, yet sustained profitability recovery depends on successfully addressing operational inefficiencies and security challenges.

JACKSONVILLE, Fla., Jan. 29, 2025 (GLOBE NEWSWIRE) -- Landstar System, Inc. (NASDAQ: LSTR) (“Landstar” or the “Company”) today reported basic and diluted earnings per share (“EPS”) of $1.31 in the 2024 fourth quarter on revenue of $1.209 billion. “The Landstar team of independent business owners and employees continued to perform admirably, despite the continuation of a challenging freight backdrop,” said Landstar President and Chief Executive Officer Frank Lonegro. “I was encouraged to see year-over-year quarterly revenue growth for the first time since the 2022 third quarter. The year-over-year revenue growth was achieved via a sequential increase in overall truck pricing as compared to the 2024 third quarter and a strong revenue performance specific to our unsided/platform service offering. We look to build on this revenue per load momentum as we begin the 2025 fiscal year. Our network of Landstar BCOs, agents and employees are optimistic for an improved freight transportation environment and will continue to strive each day to improve our safety performance and deliver great service to our customers.”

Landstar continues to return capital to stockholders through the Company’s stock purchase program and dividends. During the 2024 fiscal year, Landstar purchased approximately 452,000 shares of its common stock at an aggregate cost of $82.1 million and paid $120.5 million to stockholders in the form of cash dividends. The Company is currently authorized to purchase up to an additional 2,547,981 shares of the Company’s common stock under its longstanding share purchase program.  Landstar also announced today that its Board of Directors declared a quarterly dividend of $0.36 per share payable on March 11, 2025, to stockholders of record as of the close of business on February 18, 2025.

	4Q 2024				4Q 2023
Revenue	$	1,209,330			$	1,204,445
Gross profit	$	109,423			$	124,594
Variable contribution	$	166,523			$	178,146
Operating income	$	57,771			$	74,567
Basic and diluted earnings per share	$	1.31			$	1.62

(1) Dollars above in thousands, except per share amounts.

(2) Please refer to the Consolidated Statements of Income and Reconciliation of Gross Profit to Variable Contribution included below.

Total revenue was $1,209 million in the 2024 fourth quarter, compared to $1,204 million in the 2023 fourth quarter. Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2024 fourth quarter was $1,081 million, or 89% of revenue, compared to $1,085 million, or 90% of revenue, in the 2023 fourth quarter. Truckload transportation revenue hauled via van equipment in the 2024 fourth quarter was $597 million, compared to $619 million in the 2023 fourth quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2024 fourth quarter was $362 million, compared to $340 million in the 2023 fourth quarter. Revenue from other truck transportation, which is largely related to power-only services, in each of the 2024 and 2023 fourth quarters was $100 million. Revenue hauled by rail, air and ocean cargo carriers was $107 million, or 9% of revenue, in the 2024 fourth quarter, compared to $89 million, or 7% of revenue, in the 2023 fourth quarter.

The number of loads hauled via truck declined 3.4% in the 2024 fourth quarter as compared to the 2023 fourth quarter. This performance was slightly better than the low-end of the Company’s guidance included in its 2024 third quarter earnings release slide presentation, dated October 29, 2024. Truck revenue per load increased 3.1% in the 2024 fourth quarter as compared to the 2023 fourth quarter, in the upper half of the range of the Company’s previously provided guidance. While actual fourth quarter revenue exceeded the mid-point of the Company’s previously issued guidance, basic and diluted earnings per share fell below the mid-point of the guidance, primarily attributable to a lower than anticipated variable contribution margin and elevated insurance and claim costs, partially offset by a lower than anticipated effective income tax rate. Insurance and claims costs were 6.7% of BCO revenue during the 2024 fourth quarter, well above the Company’s average historical experience from the 2019 fiscal year through the 2023 fiscal year of 4.7%, primarily driven by both increased cargo claim costs related to fraud and theft in the supply chain and increased auto liability claim costs.

Gross profit in the 2024 fourth quarter was $109 million and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2024 fourth quarter was $167 million. Gross profit in the 2023 fourth quarter was $125 million and variable contribution in the 2023 fourth quarter was $178 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2024 and 2023 fourth quarters and year-to-date periods are provided in the Company’s accompanying financial disclosures.

The Company’s balance sheet continues to be very strong, with cash and short-term investments of approximately $567 million as of December 28, 2024. Trailing twelve-month return on average shareholders’ equity was 20%, and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 18%.

Landstar will provide a live webcast of its quarterly earnings conference call this evening at 4:30 p.m. ET. To access the webcast, visit www.investor.landstar.com; click on “Webcasts,” then click on “Landstar’s Fourth Quarter 2024 Earnings Release Conference Call.” A slide presentation to accompany the webcast presentation is also available on Landstar’s investor relations website at https://investor.landstar.com/.

About Landstar:
Landstar System, Inc., is a technology-enabled, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees. Landstar transportation services companies are certified to ISO 9001:2015 quality management system standards and RC14001:2015 environmental, health, safety and security management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market® under the symbol LSTR.

Non-GAAP Financial Measures:
In this earnings release and accompanying financial disclosures, the Company provides the following information that may be deemed non-GAAP financial measures: variable contribution and variable contribution margin. The Company believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment-by-shipment level attributable to our transportation network of third-party capacity providers and independent agents in order to provide services to our customers. The Company also believes that it is appropriate to present each of the financial measures that may be deemed a non-GAAP financial measure, as referred to above, for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making.

Forward Looking Statements Disclaimer:
The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements contained in this press release that are not based on historical facts are “forward-looking statements.” This press release contains forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s largest such agent by revenue in the 2023 fiscal year; decreased demand for transportation services; U.S. trade relationships; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; regulations requiring the purchase and use of zero-emission vehicles; intellectual property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2023 fiscal year, described in Item 1A Risk Factors, and in other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
			Fiscal Years Ended								Fiscal Quarters Ended
			December 28,				December 30,				December 28,				December 30,
			2024				2023				2024				2023
Revenue			$	4,819,245			$	5,303,322			$	1,209,330			$	1,204,445
Investment income				14,810				10,141				3,822				3,267
Costs and expenses:
	Purchased transportation			3,745,241				4,068,262				945,857				927,028
	Commissions to agents			392,751				462,668				96,950				99,271
	Other operating costs, net of gains on asset sales/dispositions			58,781				54,191				14,643				13,193
	Insurance and claims			113,929				114,241				30,099				27,270
	Selling, general and administrative			217,708				211,799				55,095				52,728
	Depreciation and amortization			56,738				58,153				12,737				13,655
		Total costs and expenses		4,585,148				4,969,314				1,155,381				1,133,145
Operating income				248,907				344,149				57,771				74,567
Interest and debt (income) expense				(5,419	)			(3,946	)			(964	)			(1,867	)
Income before income taxes				254,326				348,095				58,735				76,434
Income taxes				58,380				83,701				12,542				18,447
Net income			$	195,946			$	264,394			$	46,193			$	57,987
Basic and diluted earnings per share			$	5.51			$	7.36			$	1.31			$	1.62
Average basic and diluted shares outstanding				35,538,000				35,920,000				35,328,000				35,804,000
Dividends per common share			$	3.38			$	3.26			$	2.36			$	2.33

Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
				December 28,				December 30,
				2024				2023
ASSETS
Current assets:
	Cash and cash equivalents			$	515,018			$	481,043
	Short-term investments				51,619				59,661
	Trade accounts receivable, less allowance
		of $12,904 and $11,738			683,841				743,762
	Other receivables, including advances to independent
		contractors, less allowance of $17,812 and $14,010			47,160				43,339
	Other current assets				22,229				24,936
		Total current assets			1,319,867				1,352,741
Operating property, less accumulated depreciation
			and amortization of $456,547 and $436,682		311,345				284,300
Goodwill					40,933				42,275
Other assets					141,166				122,530
Total assets				$	1,813,311			$	1,801,846
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Cash overdraft			$	61,033			$	61,541
	Accounts payable				383,625				395,980
	Current maturities of long-term debt				33,116				27,876
	Insurance claims				40,511				41,825
	Dividends payable				70,632				71,433
	Other current liabilities				84,237				76,569
		Total current liabilities			673,154				675,224
Long-term debt, excluding current maturities					69,191				43,264
Insurance claims					62,842				58,922
Deferred income taxes and other non-current liabilities					35,685				40,513
Shareholders' equity:
	Common stock, $0.01 par value, authorized 160,000,000
		shares, issued 68,559,269 and 68,497,324			686				685
	Additional paid-in capital				255,260				254,642
	Retained earnings				2,859,916				2,783,645
	Cost of 33,243,196 and 32,780,651 shares of common
		stock in treasury			(2,131,413	)			(2,048,184	)
	Accumulated other comprehensive loss				(12,010	)			(6,865	)
		Total shareholders' equity			972,439				983,923
Total liabilities and shareholders' equity				$	1,813,311			$	1,801,846

Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
				Fiscal Years Ended								Fiscal Quarters Ended
				December 28,				December 30,				December 28,				December 30,
				2024				2023				2024				2023
Revenue generated through (in thousands):
	Truck transportation
		Truckload:
			Van equipment	$	2,447,810			$	2,742,281			$	596,573			$	618,588
			Unsided/platform equipment		1,455,663				1,490,393				361,910				339,910
		Less-than-truckload			99,828				117,683				21,926				26,913
		Other truck transportation (1)			343,253				479,173				100,400				99,702
			Total truck transportation		4,346,554				4,829,530				1,080,809				1,085,113
	Rail intermodal				84,328				98,297				18,347				24,344
	Ocean and air cargo carriers				289,902				266,638				88,173				64,280
	Other (2)				98,461				108,857				22,001				30,708
				$	4,819,245			$	5,303,322			$	1,209,330			$	1,204,445
	Revenue on loads hauled via BCO Independent Contractors (3)
		included in total truck transportation		$	1,821,989			$	1,998,408			$	447,074			$	454,774
Number of loads:
	Truck transportation
		Truckload:
			Van equipment		1,170,772				1,259,578				282,877				292,711
			Unsided/platform equipment		476,815				504,765				114,188				115,294
		Less-than-truckload			153,253				175,650				33,907				41,070
		Other truck transportation (1)			160,120				201,407				45,568				44,295
			Total truck transportation		1,960,960				2,141,400				476,540				493,370
	Rail intermodal				27,970				29,620				6,550				7,470
	Ocean and air cargo carriers				34,440				32,820				8,320				7,440
					2,023,370				2,203,840				491,410				508,280
	Loads hauled via BCO Independent Contractors (3)
		included in total truck transportation			814,150				898,610				193,510				209,350
Revenue per load:
	Truck transportation
		Truckload:
			Van equipment	$	2,091			$	2,177			$	2,109			$	2,113
			Unsided/platform equipment		3,053				2,953				3,169				2,948
		Less-than-truckload			651				670				647				655
		Other truck transportation (1)			2,144				2,379				2,203				2,251
			Total truck transportation		2,217				2,255				2,268				2,199
	Rail intermodal				3,015				3,319				2,801				3,259
	Ocean and air cargo carriers				8,418				8,124				10,598				8,640
	Revenue per load on loads hauled via BCO Independent Contractors (3)			$	2,238			$	2,224			$	2,310			$	2,172
Revenue by capacity type (as a % of total revenue):
	Truck capacity providers:
		BCO Independent Contractors (3)			38	%			38	%			37	%			38	%
		Truck Brokerage Carriers			52	%			53	%			52	%			52	%
	Rail intermodal				2	%			2	%			2	%			2	%
	Ocean and air cargo carriers				6	%			5	%			7	%			5	%
	Other				2	%			2	%			2	%			3	%
												December 28,				December 30,
												2024				2023
Truck Capacity Providers
	BCO Independent Contractors (3)												8,082				9,024
	Truck Brokerage Carriers:
		Approved and active (4)											43,718				49,111
		Other approved											26,527				27,524
													70,245				76,635
	Total available truck capacity providers												78,327				85,659
	Trucks provided by BCO Independent Contractors (3)												8,843				9,809
(1)	Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee.
(2)	Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro.
(3)	BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.
(4)	Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal quarter end.

Landstar System, Inc. and Subsidiary
Reconciliation of Gross Profit to Variable Contribution
(Dollars in thousands)
(Unaudited)
			Fiscal Years Ended								Fiscal Quarters Ended
			December 28,				December 30,				December 28,				December 30,
			2024				2023				2024				2023
Revenue			$	4,819,245			$	5,303,322			$	1,209,330			$	1,204,445
Costs of revenue:
		Purchased transportation		3,745,241				4,068,262				945,857				927,028
		Commissions to agents		392,751				462,668				96,950				99,271
	Variable costs of revenue			4,137,992				4,530,930				1,042,807				1,026,299
		Trailing equipment depreciation		27,950				31,319				7,186				7,079
		Information technology costs (1)		22,744				25,486				4,629				5,695
		Insurance-related costs (2)		115,764				116,069				30,642				27,585
		Other operating costs		58,781				54,191				14,643				13,193
	Other costs of revenue			225,239				227,065				57,100				53,552
	Total costs of revenue			4,363,231				4,757,995				1,099,907				1,079,851
Gross profit			$	456,014			$	545,327			$	109,423			$	124,594
Gross profit margin				9.5	%			10.3	%			9.0	%			10.3	%
	Plus: other costs of revenue			225,239				227,065				57,100				53,552
Variable contribution			$	681,253			$	772,392			$	166,523			$	178,146
Variable contribution margin				14.1	%			14.6	%			13.8	%			14.8	%
(1)	Includes costs of revenue incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support the Company’s independent commission sales agents, third party capacity providers, and customers, included as a portion of depreciation and amortization and of selling, general and administrative in the Company's Consolidated Statements of Income.
(2)	Primarily includes (i) insurance premiums paid for commercial auto liability, general liability, cargo and other lines of coverage related to the transportation of freight; (ii) the related cost of claims incurred under those programs; and (iii) brokerage commissions and other fees incurred relating to the administration of insurance programs available to BCO Independent Contractors that are reinsured by the Company, which are included in selling, general and administrative in the Company’s Consolidated Statements of Income.

FAQ

What was Landstar's (LSTR) revenue and EPS for Q4 2024?

Landstar reported revenue of $1.209 billion and earnings per share of $1.31 for the fourth quarter of 2024.

How much capital did LSTR return to shareholders in fiscal 2024?

Landstar returned $202.6 million to shareholders in fiscal 2024, consisting of $82.1 million in stock buybacks and $120.5 million in cash dividends.

What is LSTR's quarterly dividend payment for March 2025?

Landstar declared a quarterly dividend of $0.36 per share, payable on March 11, 2025, to stockholders of record as of February 18, 2025.

How did LSTR's truck transportation metrics change in Q4 2024?

In Q4 2024, truck load volume decreased by 3.4% while truck revenue per load increased by 3.1% compared to Q4 2023.

What was LSTR's cash position at the end of Q4 2024?

Landstar had approximately $567 million in cash and short-term investments as of December 28, 2024.