Landstar Earnings: Truck Brokerage Correction in Full Force, but Results Mostly in Line

Wide-moat truck broker Landstar's first-quarter gross revenue fell 27% year over year, mostly in line with our forecast when considering the potential for demand stabilization in the second half. Recall revenue swung negative last quarter, falling 14%, after jumping more than 33% year over year over the previous four quarters. In short, retail-sector destocking (high inventories), softening industrial end markets, and loosening truckload-industry capacity are driving down freight demand and sell-rates to shippers, especially relative to exceptionally strong levels a year ago. For the core truckload business, loads fell 12%, while average revenue per load was down 16%.