More trucking companies on Wednesday reported surging fourth-quarter earnings and higher profits for the year, including Landstar and ArcBest, thanks tax changes and increased freight demand.
Landstar System Inc. reported net income of $64.8 million, or $1.54 per share, in the 2017 fourth quarter on record revenue of $1.05 billion. This compares to net income a year earlier of $39.6 million, or 94 cents per share, with revenue of $892.8 million.
Included in the net income are one-time tax benefits of approximately $19.5 million, related to the company’s estimate of the change in future tax rates on net deferred tax liabilities as a result of Congressional tax reform signed into law late last year. Excluding this, net income was $45.2 million, or $1.08 earnings per share.
For the first time in the company's history, quarterly revenue surpassed $1 billion. Landstar also set new quarterly records for gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) and operating income in the 2017 fourth quarter. Gross profit was $149.7 million and operating income was $70 million.
The number of loads hauled by truck in the fourth quarter was also an all-time Landstar quarterly record, up 3% over the 2016 fourth quarter. This was driven by a 2% increase in the number of loads hauled via van equipment, a 4% increase in the number of loads hauled by unsided/platform equipment, and a 9% increase in less-than-truckload volume.
For all of 2017, Landstar had net income of $177.1 million, with revenue of $3.6 billion, compared to 2016 net income of $137.4 million and revenue of $3.2 billion.
"The year-over-year earnings growth rates are particularly impressive given a significant increase in the provision for incentive compensation in 2017 and the fact that 2016 had one additional week of operations compared to 2017,” said Landstar President and CEO Jim Gattoni. “During the first three weeks of 2018, we are experiencing growth in the number of loads hauled via truck in the high single-digit percentage range over the 2017 first quarter. I expect that trend to continue throughout the 2018 first quarter."
ArcBest Profit Improves, Expects Capacity Will Tighten More
ArcBest Corp. reported net income during the final three months of last year increased to $36.6 million, or $1.37 per share, from $1.6 million, or 6 cents per share, from the same time in 2016.
Revenue edged higher to $710.7 million from $688.2 million for this parent to ABF Freight.
Due to the lower corporate tax rate under the federal tax reform, the fourth quarter 2017 net income reflects the impact of a $24.5 million reduction of income tax liabilities related to deferred income taxes, according to the company.
The mainly less-than-truckload operation also reported tonnage per day in its asset-based segment decreased 4.7% in the fourth quarter, as shipments per day decreased 8.1%. As a result, total billed revenue per hundredweight increased 7.6%.
For all of 2017, net income for ArcBest increased to $59.7 million, or $2.25 per share, compared to $18.6 million, or 71 cents per share, in 2016. Revenue moved higher in 2017, totaling $2.83 billion versus $2.7 billion in 2016.
On an adjusted basis, due to the tax reform package, ArcBest had 2017 net income of $35.6 million, or $1.33 per share, compared to net income of $24.3 million, or 92 cents per share, in 2016.
ArcBest Chairman, President and CEO Judy McReynolds said 2017 presented challenging conditions with tighter capacity resulting from an improving economy, and impacts from the damaging hurricanes in August and September.
"We expect tighter capacity will continue in 2018 as the electronic logging device mandate took effect last December," she said.