Landstar quantifies suspected fraud event, delays Q1 report
Broker Landstar System has delayed its first-quarter report as it further investigates what it says was fraud tied to an independent agent working under its freight forwarding operation. The post Landstar quantifies suspected fraud event, delays Q1 report appeared first on FreightWaves.
Freight broker Landstar System announced it has delayed reporting first-quarter results as it further investigates suspected supply chain fraud that was uncovered during the last week of March. It said the event is not expected to exceed $15 million of net income before accounting for professional fees and potential insurance recoveries.
On April 2, the Jacksonville, Florida-based company cut its earnings-per-share guidance for the quarter to a range of 90 to 95 cents from $1.05 to $1.25, citing “highly elevated” insurance and claims expenses “primarily due to cargo theft and truck accident claim development.” It also flagged an investigation into “significant supply chain fraud,” which was expected to amount to a 35-to-50-cent EPS hit to the period before any insurance recovery.
A Friday update said the fraud took place in its freight forwarding unit and could be as high as a 43-cent EPS drag ($15 million after tax) on the first quarter. It also rescheduled its first-quarter earnings release date to May 13 from Tuesday and sought a five-day filing extension with the Securities and Exchange Commission.
“The rescheduling of the Company’s 2025 first quarter earnings release and the anticipated delay in filing the Company’s Form 10-Q for the 2025 first quarter relate to the ongoing evaluation of certain accounting and internal control matters in connection with this previously referenced fraud matter,” a news release stated.
“It should be noted that while investigation continues, this matter relates to the Company’s international freight forwarding operations, and the Company believes that this matter is limited to the operations of one specific independent commission sales agency.”
The report didn’t name the agency.
Landstar (NASDAQ: LSTR) said first-quarter revenue came in at $1.153 billion, which was near the upper end of its initial $1.075 billion to $1.175 billion revenue outlook provided at the end of January.
That guide was predicated on a 7% to 2% year-over-year decline in loads hauled by truck. The early-April update said loads hauled by truck were down 4% y/y through the first eight weeks of the quarter (dry van loads down 6% y/y, flatbed loads down 5% and power-only loads up 26%).
The initial outlook also forecast revenue per load to range from down 2% to up 3% y/y. Revenue per load was flat y/y through the first eight weeks of the quarter (dry van down 2% and flatbed up 4%).
The Friday update said first-quarter EPS was 95 cents, 1 cent below the current consensus estimate, before accounting for the fraud event.
Cash and short-term investments totaled $473 million at the end of the quarter.
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The post Landstar quantifies suspected fraud event, delays Q1 report appeared first on FreightWaves.
