Landstar announces higher 2Q earnings, lower revenue

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Landstar System today, July 19, reported net income for the 13-week period ended June 30 of $29.7 million, compared to net income of $29.5 million for the 2006 second quarter. Revenue for the second quarter of 2007 was $633 million compared to $643 million for the 2006 second quarter.

Included in the 2006 second quarter was $21 million of revenue for transportation services provided under the contract between Landstar Express America and the U.S. Department of Transportation/Federal Aviation Administration; there was no revenue generated under the FAA contract in the 2007 second quarter. Revenue under the FAA contract in the 2006 second quarter generated $2.6 million of operating income which, net of related income taxes, increased net income by $1.6 million. Operating margin in the 2007 second quarter was 7.8 percent, compared to 7.7 percent in the 2006 second quarter. The revenue generated under the FAA contract increased operating margin by 16 basis points in the 2006 second quarter.

Net income for the 26-week period ended June 30 was $51.3 million on revenue of $1.210 billion, compared to net income of $53.8 million on revenue of $1.253 billion in the 2006 26-week period.

“I am pleased with the performance of the Landstar business model in the 2007 second quarter,” said Henry Gerkens, president and chief executive officer of the Jacksonville, Fla.-based company. “Landstar continues to generate outstanding returns.”

The third quarter of 2006 included $30 million in revenue generated under the FAA contract, Gerkens said. “We estimate in the 2007 third quarter approximately $1.0 million of such revenue,” he said. “Based upon current business levels, no change in the current freight environment, and excluding FAA revenue from both the 2007 and 2006 third quarter, I anticipate revenue to increase in a mid-single-digit range quarter over quarter.”

Landstar System also announced that its board of directors appointed Michael A. Henning as a new board member. Henning spent most of his career at the accounting firm of Ernst & Young in various capacities, including as CEO at Ernst & Young International and deputy chairman of the firm.