Landstar System Inc (NASDAQ:LSTR) Q3 2019 Earnings Conference Call - Final Transcript

Oct 24, 2019 • 08:00 am ET

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Landstar System Inc (NASDAQ:LSTR) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning and welcome to Landstar System, Incorporation Third 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; Rob Brasher, Vice President and Chief Commercial 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.

Executive
Jim B. Gattoni

Thank you, Eunice. Good morning, and welcome to Landstar's 2019 third 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 2019 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.

During the first nine months of 2019, both truckload volume and revenue per load on loads hauled via truck, were impacted by softening conditions in the spot market. As we discussed on our 2019 second quarter earnings conference call on July 25, year-over-year growth in both revenue per load, and the number of loads hauled via truck began to decelerate during the 2018 fourth quarter. These trends continued into 2019, with revenue per load beginning to decrease on a year-over-year basis in January and the number of loads hauled via truck beginning the decrease on a year-over-year basis in April. We believe this softening has been due to slowing US manufacturing and increased available truck capacity. Also, as we anticipated at the beginning of the year, Landstar's exceptional financial results during 2018 have made for very difficult year-over-year comparisons.

During our 2019 second quarter earnings conference call, we provided revenue guidance of $1.10 billion to $1.60 billion or 12% to 16% below the 2018 third quarter. 2019 third quarter revenue is $1.012 billion or 16% below the 2018 third quarter. We also provided diluted earnings per share guidance of $1.48 to $1.54 or 6% to 9% below the 2018 third quarter. 2019 third quarter diluted earnings per share was $1.35 or 17% below the 2018 third quarter. On September 11, we announced in a Form 8-K filed with the SEC that we were more comfortable at the low end of