Landstar Profit Falls on Trucking, Brokerage Slide

Landstar System suffered a 38.7 percent decline in net profit in the third quarter, to $20.1 million, on a sharp drop in shipping demand across its trucking and brokerage businesses, the truckload operator reported Thursday.

The first domestic trucking business to report details on operations in the September quarter, Landstar said revenue declined 31.7 percent from the same period a year ago, to $1.46 billion, on a 14.6 percent drop in overall shipment count.

But Landstar, which relies largely on contracted drivers it calls business capacity owners for its main trucking business, said the decline in those shipments slowed down, from 16 percent in the first quarter to 11.9 percent in the second quarter, amid signs of greater stability in the market.

“Revenue per load began to stabilize during the 2009 third quarter,” said Landstar President and CEO Henry Gerkens. “On a sequential basis, average revenue per load with respect to the company's truck transportation services in the 2009 third quarter was approximately equal to the average revenue per load in the 2009 second quarter.”

Truck brokerage revenue fell 39.8 percent in the three months ending Sept. 26 compared to the same period a year ago, to $495.7 million.

Rail intermodal shipments fell at a sharper rate, however, dropping nearly 47 percent compared to last year and a slimmer decline in intermodal revenue per load suggested price cutting was more active on the trucking side of the business.

The tight business environment also drained Landstar’s cash reserves. Cash at the end of the period was nearly $30 million below what Landstar reported on hand at the end of 2008.