Landstar System, Inc. (NASDAQ:LSTR)
Q3 2012 Mid-Quarter Update Conference
August 30, 2012 2:00 pm ET
Henry H. Gerkens - Chairman, Chief Executive Officer, President, Member of Safety & Risk Committee and Member of Strategic Planning Committee
Good afternoon, and welcome to Landstar System Inc.'s Third Mid-quarter 2012 Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time.
Joining us today from Landstar is 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, Tory, and good afternoon, and welcome to the Landstar 2012 Third Quarter Mid-quarter Update Conference Call. As a reminder, let me review 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 less than 5 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 2011 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 2012 earnings conference call, I stated that I anticipated 2012 third quarter revenue would increase over the 2011 third quarter revenue in a range of 7% to 10%, and that earnings per diluted share would be in a range of $0.71 to $0.75 per diluted share.
We have now completed 8 weeks of the 13-week third quarter, and revenue can best be described as very choppy. Both truckload volume and truck revenue per load rate of increase experienced in the 2012 second quarter over the 2011 second quarter have moderated in the first 8 weeks of the 2012 third quarter versus the first 8 weeks of the 2011 third quarter. As a result, overall revenue in the first 8 weeks of the 2012 third quarter compared to the first 8 weeks of the 2011 third quarter is somewhat softer than I originally projected.
And although the remaining 5 weeks of any third quarter typically is the strongest period of any third quarter, I believe it prudent to lower our expected revenue increase for the 2012 third quarter over the 2011 third quarter to be consistent with recent trends.
I believe there will be some additional revenue generated by our disaster relief services in conjunction with Hurricane Isaac. However, I don't believe it will have any material impact to third quarter results, and as such, my revised revenue projections did not factor in such revenue.
As I said before, daily load volume trends have been somewhat inconsistent in the 2012 third quarter, increasing 10% one day and flat the next day when compared to the prior year. The overall truck revenue per load remains relatively high. However, the 2012 third quarter comparison to the 2011 third quarter -- 2011 third quarter is a tougher comparison and is currently running about the same as the prior year.
Additionally, our air and ocean revenue is running well below anticipated levels in the 2012 third quarter from a combination of lower volume and price.
All that being said, our new agent pipeline remains strong. We are making very good progress with our supply chain solutions strategy, and we have continued to add capacity.
As it relates to BCO capacity, so far, we have seen no meaningful change in BCO recruiting numbers in August since we initiated our electronic on-board recorder program initiative. And our BCO count, thus far, has continued to increase.
I believe the current inconsistent revenue patterns will be short-lived, and I remain very confident in Landstar's ability to execute and continue to take market share.
Assuming continuation of the current choppy revenue trends for the remainder of the 2012 third quarter, I would anticipate revenue in the 2012 third quarter to increase over the 2011 third quarter in a mid-single-digit range versus our previous 7% to 10% range. Consistent with those lowered revenue expectations, I am lowering the range of anticipated earnings per diluted share for the 2012 third quarter to $0.66 to $0.71 per diluted share.
Thank you for joining me for this short conference call and have a great upcoming weekend. I look forward to talking to you again on our October 25 third quarter earnings conference call.
Thank you for joining today's conference call. Have a good afternoon. Please disconnect your lines at this time.
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