Freight broker Landstar System (NASDAQ: LSTR) reported record quarterly revenue and net income for the 2021 second quarter Wednesday after the market close.
The Jacksonville, Florida-based company posted $2.40 per share, exceeding its recently raised guidance, which called for earnings to be “slightly above” an initial range of $2.20 to $2.30 per share.
Total revenue increased 90.7% year-over-year to $1.57 billion. The company recently abandoned comparisons to 2020 given the decimating impact COVID had on last year’s second quarter. Compared to the record-breaking first quarter of 2021, revenue was up 22%.
Dry van loads increased by 10.9% sequentially in the second quarter with revenue per load up by 5.9% at $2,373. Flatbed loads were up 18.4% from the first quarter with revenue per load increasing 10.1% to $2,972. Less-than-truckload volumes grew by 9.1% sequentially with revenue per load up 3.7%.
“This outperformance was particularly impressive considering we were following an already record-setting first quarter,” Jim Gattoni, president and CEO, stated in the press release. “We attribute this strong demand to an ongoing, broad-based economic recovery, with particular strength in consumer spending, that has been a big driver of freight activity.”
Total dry van revenue doubled on a year-over-year comparison and was up 60% from the second quarter of 2019, which was a more typical freight year. Flatbed revenue was 31% higher than the 2019 period.
“Consumer demand for durable goods, building products, and e-commerce, which were strong in the first quarter of 2021, continued to drive record quarterly van revenue, while revenue generated via unsided/platform equipment benefited from growth in the U.S. metals and machinery sectors,” Gattoni added.
The higher revenue profile resulted in a 55.4% operating margin, defined as operating income divided by gross profit, nearly double the year-ago result and 80 basis points higher than the first quarter. This was the second consecutive quarter the margin was significantly ahead of the company’s long-term target of 50%.
For the third quarter, Landstar expects revenue to be in a range of $1.55 billion to $1.6 billion and EPS of $2.20 to $2.30. Truck revenue per load is expected to be slightly higher than the second quarter with loads hauled by truck coming in slightly lower sequentially.
While Landstar’s second and third quarters of each year are fairly similar, the anticipated step down in EPS is due to an increase in insurance and claims expense as premiums increase and the number of claims has already stepped higher thus far in the quarter.
Analysts’ current estimates for Landstar’s third quarter range from $2.26 to $2.31.
During the quarter, trucks provided by business capacity owners increased 2.6% from the first quarter and total truck capacity on the platform was up 6.6% sequentially to nearly 89,000 units.
Landstar raised its regular dividend by 19% to 25 cents per share. This was the largest increase to the quarterly dividend in company history.
Landstar will hold a conference call to discuss these results on Thursday at 8 a.m. Stayed tuned to FreightWaves for continuing coverage of Landstar’s second-quarter results.