Landstar System, Inc. (NASDAQ:LSTR)
Third Mid-Quarter 2013 Update Conference
August 29, 2013 2:00 pm ET
Henry H. Gerkens - Chairman, Chief Executive Officer, President, Member of Strategic Planning Committee and Member of Safety & Risk Committee
Good afternoon, and welcome to Landstar System, Inc.'s Third Mid-Quarter 2013 Conference Call. [Operator Instructions] Today's call is being recorded. If you have any objections, you may disconnect at this time.
Joining us today from Landstar, Henry Gerkens, Chairman, President and CEO. Now I would like to turn the call over to Mr. Henry Gerkens. Sir, you may begin.
Henry H. Gerkens
Thanks, Teri, and good afternoon, and welcome to the Landstar 2013 third quarter mid-quarter update conference call.
As a reminder, let me review how our mid-quarter update call works. There is no question-and-answer period during this call. The purpose of the call is to provide a brief update on how management sees the current quarter shaping up as it relates to business levels and earnings projections. The call will last only a couple of minutes.
Before we start, 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, I may make certain statements containing forward-looking statements, such as statements which relate to Landstar's business objectives, plans, strategies and expectations. Such statements are, 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 2012 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 statements, and Landstar undertakes no obligation to publicly update or revise any forward-looking statements.
During our second quarter 2013 earnings conference call, I stated that: one, I anticipated 2013 third quarter revenue to be in the range of $670 million to $715 million; two, that I anticipated 2013 third quarter operating margin to be in the range of 46% to 48%; and that, three, I anticipated 2013 third quarter earnings per diluted share to be in a range of $0.67 to $0.72 per diluted share.
Through the first 8 weeks of the 2013 third quarter, revenue remains somewhat choppy, but improved from the trends experienced in the 2013 second quarter when compared to the 2012 second quarter. Although total truck transportation revenue for the first 8 weeks of the 2013 third quarter continued to be below revenue generated in the comparable 8 weeks of the 2012 third quarter, both total load volume and revenue per load trends for the 2013 8-week period of the third quarter, compared to the 2012 8-week period of the third quarter, was improved from the declines experienced in the 2013 second quarter compared to the 2012 second quarter.
To further illustrate the overall improving current year month over prior year month consolidated revenue trends, revenue for 2013 in April versus April of 2012 was down 6.9%. May 2013 revenue versus May 2012 revenue declined 8.8%. June 2013 revenue versus June 2012 revenue declined 7.4%. July 2013 revenue versus July 2012 revenue declined 5.7%. And revenue from the 2013 August period, which ended August 25, 2013, is estimated to decline approximately 3% from the comparable 2012 August period. I'm very encouraged by the improving revenue trends and would anticipate to show continual gradual improvement in revenue trends as we move throughout the balance of the third quarter into the fourth quarter and into 2014.
Based upon the results thus far in the 2013 third quarter and a continued improvement in revenue trends, I am tightening my range of estimated revenue for the 2013 third quarter to $680 million to $700 million. Based upon that range of revenue for the 2013 third quarter and assuming the same level of insurance and claims expense as a percentage of BCO revenue as incurred in the 2013 second quarter, I now see the 2013 third quarter operating margin to be between 46% and 47% and the estimated 2000 (sic) [ 2013 ] third quarter earnings per diluted share in the range of $0.67 to $0.70 per diluted share.
I want to thank you for joining me on this short conference call and have a great weekend, and I look forward to talking to you again on our October 24 third quarter earnings conference call. Thanks.
Thank you for joining the conference call today. Have a good afternoon. Please disconnect your lines at this time.
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