Landstar System Inc. (NASDAQ:LSTR) Q1 2019 Earnings Conference Call - Final Transcript
Apr 25, 2019 • 08:00 am ET
Good morning, and welcome to Landstar System Incorporation's First Quarter 2019 Earnings Release Conference Call. All lines will be in a listen-only mode until the formal question-and-answer session. Today's call is being recorded. If you have any objections, you may disconnect at this time. Joining us today from Landstar are Jim Gattoni, President and CEO; Kevin Stout, Vice President and CFO; Pat O'Malley, Vice President and Chief Commercial and Marketing Officer; Joe Beacom, Vice President and Chief Safety and Operations Officer.
Now, I would like to turn the call over to Mr. Jim Gattoni. Sir, you may begin.
Jim B. Gattoni
Thank you, Prema. Good morning, and welcome to Landstar's 2019 first quarter earnings conference call. Before we begin let me read the following statement. The following is a Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. Statements made during this conference call that are not based on historical facts are forward-looking statements.
During this conference call, we may make statements that contain forward-looking information that relates to Landstar's business objectives, plans, strategies, and expectations. Such information is, by nature, subject to uncertainties and risks including but not limited to the operational, financial, and legal risks detailed in Landstar's Form 10-K for the 2018 fiscal year described in the section Risk Factors and 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 information, and Landstar undertakes no obligation to publicly update or revise any forward-looking information.
Landstar had a successful 2019 first quarter, as we set numerous first quarter financial records, including gross profit, operating income, net income and earnings per share. This performance was achieved even as the overall freight environment softened from the exceptional freight environment of 2018.
As it relates to revenue, we ended 2018 with decelerating growth rates in truck revenue per load and truck loadings. This deceleration in growth rates along with a difficult year-over-year comparison attributable to 2018's very strong financial performance, resulted in 2019 first quarter revenue to be slightly below revenue in 2018 first quarter.
Nevertheless, the Company's 2019 first quarter results were generally in line with the expectations that were communicated in our first quarter guidance, as provided during our 2018 fourth quarter earnings conference call held on January 31st.
Truck capacity appeared to be more readily available in the 2018 fourth quarter than during the first nine months of 2018. As anticipated, 2019 first quarter truck capacity continued to be more readily available as compared to the 2018 first quarter, putting downward pressure on spot rates.
During the 2019 first quarter, growth in the number of loads hauled via truck slowed as compared to recent quarters. We experienced significant growth in truck loadings in the 2017 and 2018 first quarters, driven partly by the best operating environment in decades during 2018. That volume growth made for challenging comparisons of the 2019 first quarter to