Landstar Q3 EPS Misses Consensus as $21 Million in Insurance Claims Adjustments Offset 25% Revenue Growth

Landstar System (NASDAQ: LSTR) reported third-quarter earnings per share of $1.42 on Tuesday, missing the consensus estimate by 24 cents, as adverse insurance claims adjustments offset otherwise strong freight demand. The truckload broker recorded $13 million (29 cents per share) in unfavorable claims reserve adjustments and $8 million (18 cents per share) in adverse developments on two prior-year claims, totaling $21 million in charges. Consolidated revenue rose 25% year over year to $1.51 billion, roughly in line with consensus. Total truck revenue increased 29% to $1.41 billion on a 3% gain in loads and a 25% jump in revenue per load, driven by higher diesel fuel prices and improving truckload pricing. Dry van loads rose 6% with revenue per load up 23%; flatbed loads rose 4% with yield up 29%. Total truck loads were up 7% year over year in October, with revenue per load 29% higher. Insurance and claims expenses climbed 220 basis points year over year to 9.4% of business capacity owner revenue, reflecting a multi-year spike in nuclear verdicts. Adjusted operating margin fell 220 basis points to 30.9% of variable contribution, which rose 25% to $212 million.