Landstar System’s (NASDAQ:LSTR) earnings of $1.35 per share in third-quarter 2019 missed the Zacks Consensus Estimate by 9 cents. Moreover, the bottom line declined 17.2% on a year-over-year basis despite lower costs.
Revenues of $1,011.7 million too fell short of the Zacks Consensus Estimate of $1,025.5 million. The top line also decreased 15.8% year over year. Lower truck volumes and the resultant decline in truck revenues, mainly due to unfavorable market conditions, hampered results. Management on the conference call stated that the rate paid to truck brokerage carriers in the third quarter was 116 basis points, lower than the year-ago figure.
Gross profit (revenues excluding the cost of purchased transportation and commissions to agents) came in at $152.6 million in the reported quarter, down 10.9% year over year. Further, operating margin (operating income divided by gross profit) dipped to 46.3% from 50.8% in the prior year. Total costs and expenses (on a reported basis) declined to $942.3 million from $1.12 billion a year earlier.
Total revenues in the truck transportation segment — accounting for bulk (92.1%) of the top line — were $932.1 million, down 16.6%. Rail intermodal revenues of $28.97 million also fell 15.8%. Plus, ocean and air cargo carriers generated revenues of $30.36 million that slipped year over year. Meanwhile, other revenues augmented 11.1% to $20.1 million.
Truckload transportation revenue hauled via van equipment in the reported quarter declined 19.8% to $575 million. Also, truckload transportation revenue hauled via unsided/platform equipment decreased 13.3% to $331.8 million. Moreover, revenue hauled by rail, air and ocean cargo carriers was $59.3 million in the third quarter, down 9.7% year over year. The overall third-quarter truck revenue per load too dropped 12.7% on a year-over-year basis.
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