Dividend up as Landstar System reports $1.153B Q1 revenue

Landstar System, Inc. (NASDAQ: LSTR) (“Landstar” or the “Company”) reported basic and diluted earnings per share (“EPS”) of $0.85 in the 2025 first quarter on revenue of $1.153 billion. “The Landstar team of independent business owners and employees continued to perform admirably, despite a highly unpredictable macro-economic backdrop,” said Landstar President and Chief Executive Officer Frank Lonegro. “I was encouraged by the number of loads hauled via truck in the quarter. Importantly, this was the first time in fifteen years that the number of loads hauled via truck during the first quarter exceeded the immediately preceding fourth quarter. Our network of Landstar BCOs, agents and employees are laser-focused on safety, security and delivering great service to our customers in an extremely fluid freight transportation environment.”

(1) Dollars above in thousands, except per share amounts.
As previously disclosed in Current Reports on Form 8-K filed with the U.S. Securities and Exchange Commission on April 2, 2025 (the “April 2nd 8-K”), and subsequently on April 25, 2025 (the “April 25th 8-K”), during the last week of the Company’s 2025 first quarter, Landstar identified a supply chain fraud relating to the Company’s international freight forwarding operations that does not involve its core North American truckload services. While investigation, remediation and collection efforts continue, the 2025 first quarter results include a $4.8 million pre-tax charge, or $0.10 per share, relating to this matter. This charge currently reflects the total anticipated adverse financial impact to Landstar relating to the fraud, net of certain actual and anticipated recoveries and before taking into account the cost of legal and other professional fees as well as additional potential recoveries in the future. This charge is reflected in selling, general & administrative costs.

Landstar continues to return capital to stockholders through the Company’s stock purchase program and dividends. During the 2025 first quarter, Landstar purchased approximately 386,000 shares of its common stock at an aggregate cost of $60.9 million and paid $83.3 million to stockholders in the form of cash dividends. The Company is currently authorized to purchase up to an additional 2,161,663 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 $0.40 per share payable on June 24, 2025, to stockholders of record as of the close of business on June 5, 2025. This quarterly dividend includes a $0.04 per share increase, or 11% over the amount of the Company’s regular quarterly dividend declared following each of the prior three quarters.

Total revenue was $1,153 million in the 2025 first quarter, compared to $1,171 million in the 2024 first quarter. Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2025 first quarter was $1,050 million, or 91% of revenue, compared to $1,069 million, or 91% of revenue, in the 2024 first quarter. Truckload transportation revenue hauled via van equipment in the 2025 first quarter was $595 million, compared to $628 million in the 2024 first quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2025 first quarter was $340 million, compared to $343 million in the 2024 first quarter. Revenue from other truck transportation, which is largely related to power-only services, in the 2025 first quarter was $92 million, compared to $72 million in the 2024 first quarter. Revenue hauled by rail, air and ocean cargo carriers was $83 million, or 7% of revenue, in the 2025 first quarter, compared to $77 million, or 7% of revenue, in the 2024 first quarter.

The number of loads hauled via truck declined 1.2% in the 2025 first quarter as compared to the 2024 first quarter. This performance was slightly better than the high-end of the Company’s guidance range of 7% below to 2% below prior year included in its 2024 fourth quarter earnings release slide presentation, dated January 29, 2025 (the “2025 First Quarter Guidance”). Truck revenue per load decreased 0.6% in the 2025 first quarter as compared to the 2024 first quarter, below the mid-point of the guidance range of 2% below to 3% above prior year provided in the 2025 First Quarter Guidance. As a result, first quarter revenue exceeded the mid-point of the range included in the Company’s 2025 First Quarter Guidance.

The April 25th 8-K announced that 2025 first quarter EPS was $0.95, prior to giving effect to any potential adverse impact from the supply chain fraud matter referenced above. As also noted in the April 25th 8-K, the adverse financial impact to Landstar, before taking into account the cost of legal and other professional fees or any potential insurance and other recoveries, was not expected to exceed $0.43 per share on an after-tax basis. As previously stated, 2025 first quarter EPS was $0.85, inclusive of $0.10 per share relating to the supply chain fraud matter. As previewed by the April 2nd 8-K, 2025 first quarter EPS also reflected highly elevated insurance and claim costs of 9.3% of BCO revenue, well above the Company’s average historical experience from the 2019 fiscal year through the 2024 fiscal year of 4.9%, primarily due to cargo theft and truck accident adverse prior year claim development.

Gross profit in the 2025 first quarter was $98 million and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2025 first quarter was $161 million. Gross profit in the 2024 first quarter was $114 million and variable contribution in the 2024 first quarter was $168 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2025 and 2024 first quarters 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 $473 million as of March 29, 2025. Trailing twelve-month return on average shareholders’ equity was 18%, and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 17%.