Landstar posts lower 2Q profit

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Landstar System Inc. on Wednesday, July 15, reported 2009 second-quarter net income of $17.9 million from revenue of $491.2 million. Included in the 2009 second quarter was $2.0 million of costs related to two acquisitions that were completed in the first week of the 2009 third quarter. Net income for the 2008 second quarter was $29.8 million from revenue of $697.7 million.

Revenue in the 26-week period ended June 27 was $960 million compared to $1.306 billion for the 2008 26-week period. Net income was $31.8 million compared to $53.5 million.

“In the 2009 second quarter, Landstar’s revenue continued to be negatively impacted by the severe recession in the domestic and global economies,” said Henry Gerkens, president and chief executive officer of the Jacksonville, Fla.-based company. “As was the case in the 2009 first quarter, revenue declines were experienced in just about every sector, including revenue generated from the U.S. Department of Defense. As anticipated, significant revenue declines occurred in the automotive sector and in our substitute line-haul service offering.”

Gerkens said that from a load volume perspective, the number of loads hauled in the 2009 second quarter decreased 16 percent compared to the 2008 second quarter, better than the 17 percent decline experienced in the 2009 first quarter compared to the 2008 first quarter, demonstrating a slow improvement in overall demand. “However, this improvement was more than offset by continued pressure on price, which was caused in part by lower fuel surcharge revenue on freight hauled by third-party truck brokerage carriers and rail, ocean and air cargo carriers,” he said.

Gerkens said he doesn’t foresee a significant change in the current freight environment as Landstar moves through the third quarter. “However, there has been a slight improvement in volume trends,” he said. “In addition, some of the very difficult revenue comparisons experienced during the first half of 2009 begin to ease toward the end of the 2009 third quarter and into the 2009 fourth quarter. I believe the worst is over. That being said, there continues to be some level of uncertainty in the marketplace.”