Revenue drops 16% at trucking company because of “weaker economic conditions” in U.S. manufacturing.
Landstar System Inc. last week reported lower third-quarter earnings and revenue, as slowing freight volumes impacted the Jacksonville-based trucking company.
Earnings of $1.35 a share were down from $1.63 in the third quarter of 2018 and revenue dropped 16% to $1.012 billion.
The lower earnings were not a surprise because CEO Jim Gattoni told investors at a conference last month that results would be below expectations.
“Through the first half of 2019, I believe we were in a relatively healthy freight environment,” Gattoni said last week during Landstar’s quarterly conference call with analysts.
“More recently though, weaker economic conditions, especially in the U.S. manufacturing sector, appear to have led to seasonal softness in Landstar’s truck volumes,” he said.
“We experienced the softness particularly in September and into the first several weeks of October.”
Gattoni said Landstar has seen weakness in the automotive, food and metals sectors, which was partially offset by an increase in consumer durable goods shipments.
Despite the lower earnings this year, Gattoni sees the company’s performance as strong.
“As we anticipated in the beginning of the year, Landstar’s exceptional financial results during 2018 have made for very difficult year-over-year comparisons,” he said.
This year’s earnings were the second-highest third-quarter results in Landstar’s history, behind the 2018 third quarter, he said.
With softness continuing into October, Landstar is projecting fourth-quarter earnings to be below last year.
Gattoni projected fourth-quarter earnings of $1.40 to $1.46 per share on revenue of $970 million to $1.02 billion.
Landstar earned $1.68 a share on revenue of $1.182 billion in the fourth quarter of 2018.
One Call Corp. recapitalizes, reduces debt $1B
Jacksonville-based One Call Corp. said Friday it completed a recapitalization that reduced its debt by nearly $1 billion.
The transaction included a $375 million investment in the company led by lenders KKR and GSO Capital Partners.
One Call said the deal reduces its annual interest expense by $90 million and “substantially strengthened” its liquidity.
“As a financially stronger company backed by world-class investment firms, we are now better positioned to execute on our long-term strategy,” CEO Rone Baldwin said in a news release.
One Call, which provides workers’ compensation care management services, is headquartered at 841 Prudential Drive on the Downtown Southbank.
When the company moved into that building last year, it employed about 1,500 people at the headquarters.
NextEra mum about its JEA bid
A day after NextEra Energy Inc. made the cut of nine remaining bidders that could buy JEA, NextEra held its quarterly conference call with analysts.
However, in response to a direct question from an analyst about JEA and how long the process of a sale might take, NextEra officials were mum.
“We’re limited on what comments we may make on it,” said NextEra Chief Financial Officer Rebecca Kujawa.
“I’d fall back to the fact that we’ve continued to be interested and of course as you well know, JEA released its list of folks that made it to the next round and of course we were on there,” she said.
Juno Beach-based NextEra is the parent of Florida Power & Light Co., which provides power for about 5 million customers covering most of the east coast of Florida outside of Jacksonville.
At the beginning of 2019 it acquired Gulf Power Co., which serves about 460,000 customers in eight counties in Northwest Florida.
NextEra last week reported third-quarter adjusted earnings of $2.39 a share, 22 cents higher than last year, on revenue of $5.6 billion.
Kujawa said the company expects to continue growing earnings per share by 6% to 8% a year through 2022.
St. Augustine work helps Northrop
Northrop Grumman Corp. last week reported better-than-expected third-quarter earnings, as the company announced more contracts for work at its St. Augustine aerospace facility.
The Virginia-based aerospace and defense firm reported earnings of $5.49 a share, down from $7.11 in the third quarter of 2018. However, last year’s earnings included special benefits that raised earnings by $1.48 a share.
Although earnings were lower than last year, Northrop’s results beat the consensus forecast of $4.74 a share by analysts surveyed by Zacks Investment Research.
Northrop said it received several “significant” new contracts during the third quarter, including a $1.4 billion award to deliver an additional nine E-2D Advanced Hawkeye aircraft and related equipment to Japan.
Work on that contract will be done at several Northrop facilities but the largest amount, 29%, will be done in St. Augustine.
This is the second new contract for the E-2D announced this year after the U.S. Department of Defense in April announced a $3.2 billion contract to buy 24 aircraft.
The E-2D has been a significant program for the St. Augustine facility since Northrop Grumman began building the tactical early warning aircraft in 2003. The first flight of an E-2D took off from St. Augustine in 2007.
Northrop is projecting total sales of about $34 billion this year. The company last week upgraded its earnings forecast for the full year from its previous projection of $19.30 to $19.55 a share to a range of $20.10 to $20.35.
Lower beer sales hit Anheuser-Busch
Anheuser-Busch InBev’s stock dropped sharply Friday after the global beermaker reported lower third-quarter earnings.
The Belgium-based company, which has an Anheuser-Busch brewery in North Jacksonville, reported adjusted earnings of 94 cents a share, down from $1.11 in the third quarter of 2018.
Revenue rose 2.7% to $13.2 billion but total volume of products sold fell by 0.5%. Non-beer volumes rose 4% but beer volume, its biggest business, dropped 0.9%.
In its news release, the company said sales of hard seltzer products are growing and it sees that as an opportunity.
“We believe that as the hard seltzer category evolves, consumers will demand more choices and that a portfolio approach will be critical to long-term success,” it said.
Anheuser-Busch already has hard seltzer brands on the market and said it is launching Bud Light Seltzer, “which we believe will leverage the equity of an established brand in a new category.”
Anheuser-Busch’s stock dropped $9.77 to $81.63 in U.S. trading Friday.
Cannabis retailer MedMen triples revenue
MedMen Enterprises Inc., which opened its first Northeast Florida store Oct. 30, tripled its revenue in the fiscal year ended June 29.
The cannabis retailer Monday reported $130 million in revenue for the fiscal year.
However, the publicly traded company, which is trying to build a nationwide retail presence, recorded a net loss of $277 million, or 75 cents a share.
MedMen opened its store at 308 Third St. S. in Jacksonville Beach, one of seven Florida locations opened in the past six months.
MedMen also is planning a Jacksonville store at 1059 Park St. at Park and Lomax streets in Five Points.
The company said Monday it expects to open five more Florida stores by the end of this year.
The California-based company expects Florida to be a significant market. It is licensed for up to 35 stores in the state.
“Florida is the third most populous state with a robust medical cannabis program serving over 200,000 qualified patients,” MedMen said in a news release.
MedMen also is backing efforts to make cannabis legal for all uses in Florida.
Be the first to know the latest breaking news and information that business leaders rely on in this fast-paced changing Northeast Florida economy. Regional business news, trends and statistics needed to grow your business. Key upcoming events you won’t want to miss and much more. Click Here to Grow your Business NOW!