Landstar System Inc. (NASDAQ:LSTR) has found itself at the center of a significant supply chain fraud investigation, leading to a major revision of its first-quarter 2025 earnings guidance. Investors have responded to the revelation, disclosed in a late Wednesday 8-K filing, with Landstar’s stock taking a hit over the past 24 hours.
According to Landstar’s recent update, the company initially anticipated Q1 2025 earnings per share to range between 90 cents and 95 cents, assuming revenue remained at the midpoint of its prior guidance. However, this outlook changed drastically after the company uncovered a supply chain fraud incident during the final fiscal week of the quarter. While the details remain under investigation, the fraud is believed to have resulted in “an impairment of trade accounts receivable recorded on Landstar’s December 28, 2024, balance sheet.” Landstar also noted the event “does not involve the Company’s core North American truckload services.”
Landstar now expects this fraud to negatively impact EPS by an additional 35-50 cents. Before factoring in any potential insurance or other recoveries, this translates to a financial hit of approximately $12.5 million to $17.9 million, based on the company’s 35.7 million outstanding shares. Its earlier guidance for the quarter was $1.05 to $1.25 per share.
Beyond the direct financial impact of the fraud, Landstar is also grappling with highly elevated insurance and claims costs, driven largely by cargo theft and truck accident claims, according to the 8-K. These factors had already placed pressure on the company’s bottom line before the fraud was uncovered.
The remainder of the Landstar statement regarding its finances and the fraud was mixed. It said in the first eight weeks of the quarter, loads hauled by the company were down 4% from the corresponding period of 2024. Its earlier first-quarter guidance was that the company would be down 2% to 7% on loads hauled.
Revenue per load in the first eight weeks of 2025 was approximately equal to a year ago, Landstar said. Loads hauled on what it described as “unsided/platform equipment,” presumably flatbed, had a 4% increase in revenue per load, while van loads had a 2% decrease.
Additionally, Landstar repurchased approximately $60 million worth of shares during Q1 2025, demonstrating confidence in its long-term prospects despite the current turbulence. However, this move has done little to ease investor anxiety in the wake of the fraud disclosure.
Investors responded swiftly. As of Thursday, company shares have dropped 7.87%, falling $11.95 to $139.98. The stock traded as high as $150.89 before plunging to a low of $139.92.
FreightWaves has reached out to Landstar System for comment.
Note: Stock information was pulled at 1:30pm EST on Thursday.
John Kingston contributed to this report.
The Tennessee beef bandits
Police say a fraudulent trucking company executed a large-scale cargo theft in Tennessee, stealing 80,000 pounds of beef valued at $350,000 from Southeastern Provisions in Bean Station on March 27.
According to police reports, the theft was uncovered when two customers reported missing shipments. Investigators found that the loads had been subcontracted to a company called “List Trucking Sales,” which has since become unresponsive. The dispatcher, identified as “Ahmed Wengy,” also ceased communication.
Authorities discovered that the driver’s identification was never verified before the shipments were loaded, and the provided company details could not be authenticated. The stolen loads were intended for destinations in Kentucky and Michigan, but their current whereabouts remain unknown.
Learn more about the incident here.
Memphis sees a drop in cargo theft, fraud
Memphis police recently reported a significant decline in business burglaries and cargo thefts in 2025, with commercial thefts down 40% compared to last year. Cargo thefts from train cars have dropped 73%, while thefts from tractor-trailers have fallen 46%.
Police Chief CJ Davis attributes this success to improved communication between businesses and law enforcement. Strategic measures, such as coordinating train schedules to reduce idle time and enhancing surveillance footage sharing, have played a key role.
Learn more in this video about how cargo theft affects the Memphis community.
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