Landstar System announced that its fourth-quarter earnings were $28.7 million, down from $41.8 million in the fourth quarter of 2005, which was boosted by a contract with the Federal Aviation Administration to provide disaster relief services during the busy hurricane season in the Southeast.
“The 2006 fourth quarter was one of the most challenging quarters Landstar has experienced,” said Henry Gerkens, chief executive officer of the Jacksonville, Fla.-based company. Gerkens said the results “show the power of the Landstar business model.” Landstar does not own trucks itself but contracts with drivers who own their own trucks to haul freight around the country.
For all of 2006, Landstar earned $113.1 million, compared with $115.6 million in 2005. The 2005 earnings were increased by $31.6 million because of disaster relief services. Landstar continues to provide services under the FAA contract, but it increased 2006 earnings by only $8.9 million.
Revenue in 2006 was about the same as 2005 at $2.5 billion, including disaster relief-related revenue. Gerkens said the soft demand for trucking services, which is putting downward pressure on pricing, has continued into 2007, but that he expects that to improve later in the year.