“Despite a continuing weak freight environment, Landstar continued to increase its revenue ... continues to generate outstanding returns.” -Henry Gerkens, Landstar‘s president and CEO, from the company‘s first quarter earning statement.
Are things getting better in trucking? Are we turning a corner, so to speak? Well, more than a few carriers seem to think so, according to some of things I‘m reading.
Take the Evans Network of Companies, for example - a conglomeration of several regional trucking companies. Albert “Bert” Evans, Jr., the company‘s president and CEO, recently said he expects Evans Network to realize a 15% to 17% increase in its trucking capacity this year - and is anticipating double-digit financial growth for 2008.
(Bert Evans thinks things are turning around in trucking ... at least for his company.)
“The combination of technology enhancements, process improvements and dedicated employees fueled Evans Network‘s growth in the past and will greatly influence the future of this company,” he noted.
”[We] opened 20 new service centers last year and we are on pace for the same growth in 2008,” added Matthew “Bo” Bates, vice president at Evans Network. He pointed out that in 2001, the Evans Network consisted of 600 independent contractors that today have more than doubled to 1,250.
(Matthew "Bo" Bates also has confidence in trucking's turnaround, where Evans is concerned ...)
Evans Network, a $185 million revenue operation with 80 service centers across the U.S., is growing in a couple of ways, expanding current operations while buying up some companies, too. The network acquired four companies in the last several years - West Motor, All Points, Hale Intermodal, and the most recent last year, Sanger - and has partnered with DW Whitebread and Bucks Inc. to offer more capacity and resources to their customers.
Henry Gerkens - Landstar‘s president and CEO, whose quote started off this entry - is also on the confident side of things. He noted that his company posted 6% consolidated revenue growth in the first quarter this year versus the same period in 2007. He added that revenue hauled by the company‘s truck brokerage carriers increased 11%, revenue hauled by rail carriers increased 25%, and revenue hauled by ocean cargo carriers increased 41%.
Landstar also improved its operating margin to 6.7% in the first quarter compared to 6.4% in the same period last year, said Gerkens - not too shabby, considering how fast the price of diesel has gone up.
Gerkens also pointed out that Landstar‘s trailing twelve month return on average shareholders‘ equity remained high at 53% and trailing twelve month return on invested capital, net income divided by the sum of average equity plus average debt, was 33%. The carrier also reduced debt by $17 million in the first quarter and increased cash and short-term investments by $21 million, ending the quarter with $105 million in cash and short-term investments on hand.
“I anticipate the second quarter to be similar to that of the first quarter of 2008,” he noted in the company‘s earnings release. “As such, I would anticipate revenue for the second quarter of 2008 as compared to the second quarter of 2007 to increase in the mid to upper single digits.”
That‘s a pretty bold statement, I must say. But Gerkens, like Evans, wouldn‘t be saying these things in such a public manner if there wasn‘t some pretty good data behind them - data that shows that things are improving out there in the freight world. Let‘s see if this confidence is borne out by reality.