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Freight delivery company Landstar (NASDAQ:LSTR) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 1.6% year on year to $1.16 billion. Its non-GAAP profit of $0.95 per share was in line with analysts’ consensus estimates.
Is now the time to buy LSTR? Find out in our full research report (it’s free).
Landstar’s first quarter results were shaped by persistent softness in freight demand and a challenging insurance claims environment. CEO Frank Lonegro highlighted that heavy-haul services delivered a 6% year-over-year revenue increase, bucking the overall industry trend. However, the quarter was marred by a $4.8 million pre-tax charge related to an isolated supply chain fraud incident in international freight forwarding, as well as a substantial increase in insurance and claims costs—driven largely by heightened cargo theft and adverse accident developments. Management noted these insurance expenses reached 9.3% of BCO revenue, significantly above historical norms. CFO Jim Todd explained, “Severity on cargo claims was up something like 155% year-over-year in the 2025 first quarter,” underscoring the impact of industry-wide freight fraud. Heavy-haul, machinery, and electrical loads provided some resilience, but pressures in automotive and cross-border trade weighed on overall performance.
Looking forward, Landstar’s leadership remains cautious amid macroeconomic and trade policy uncertainty. The company is not issuing formal revenue or profit guidance, citing ongoing volatility from U.S. tariffs and shifting cross-border dynamics, especially with Mexico and Canada. CEO Frank Lonegro emphasized the need for vigilance regarding insurance and fraud risks, noting ongoing investments in technology and specialized personnel to address these challenges. He added, “It is going to take not just the industry and the people in the process and the technology...but also a fair amount of government help.” Management expects insurance costs to remain above historical averages in the near term while continuing to focus on strategic initiatives such as expanding heavy-haul, improving BCO retention, and deepening relationships with key customers. The company is closely monitoring regulatory changes around driver language proficiency, which could alter industry capacity and present both risks and opportunities in upcoming quarters.
Management attributed the quarter’s results to heavy-haul segment growth, increased insurance claims severity, and the financial impact of a unique supply chain fraud event. Ongoing macroeconomic and regulatory shifts also played a role.
Looking ahead, Landstar expects continued freight demand variability and elevated insurance costs, with strategic focus areas set to influence revenue and margin trends.
The StockStory team will be watching for (1) whether Landstar’s investments in fraud prevention and insurance risk management yield lower claims costs, (2) the pace of recovery in automotive and cross-border segments as trade policy clarity improves, and (3) further momentum in heavy-haul and specialized freight services. Ongoing regulatory changes and customer diversification efforts will also serve as key markers of the company’s execution.
Landstar currently trades at a forward P/E ratio of 24×. In the wake of earnings, is it a buy or sell? The answer lies in our full research report (it’s free).
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