Impact of a $3.4 million jury verdict and other charges may influence Landstar's Q3 performance
In a recent development, logistics company Landstar System has announced a series of charges that will impact its third quarter financials for this year. The charges include a jury verdict related to an accident involving its subsidiary Landstar Ranger, the disposition of its Mexican subsidiary Landstar Metro, and the winding down of its Blue TMS platform.
Accident-Related Charge
A Texas jury has found Landstar Ranger, a subsidiary of Landstar System, to have acted as a broker, not a motor carrier, in a 2021 "tragic vehicular accident." The jury awarded a total of $22.8 million in damages, with 15% ($3.42 million) attributed to Landstar Ranger.
Landstar had previously accrued an immaterial amount for the accident and does not anticipate a significant change in accruals. The potential post-trial motions or appeals could affect the final outcome, but near-term legal exposure is considered limited. The verdict is unlikely to impact a $12 million "no claims bonus" program Landstar has in place with third-party insurers.
Mexican Subsidiary Disposition
Landstar System is actively marketing its Mexican subsidiary, Landstar Metro, for sale due to underperformance. This decision leads to a non-cash goodwill and asset impairment charge estimated between $13 million and $17 million, which will reduce reported Q3 earnings by approximately $0.28 to $0.37 per share. The sale is not expected to disrupt U.S./Mexico cross-border operations materially.
Blue TMS Platform
The company is also winding down its Blue TMS platform, resulting in a separate $9 million non-cash impairment charge in Q3.
All these impairment charges are non-cash and will primarily affect GAAP earnings, reflecting asset write-downs rather than cash expenses. Operational impact appears limited, focusing the financial effects on reported earnings volatility rather than immediate cash flow or ongoing service disruption.
This article is written by Todd Maiden. As of 12:04 p.m. EDT on Wednesday, shares of LSTR were up 0.6% compared to the S&P 500, which was up 0.2%.
[1]: Landstar System Inc. (2025). Form 8-K. Retrieved from https://www.sec.gov/Archives/edgar/data/1408689/000119312522221190/d947380dex8k.htm [3]: Landstar System Inc. (2025). Press Release. Retrieved from https://www.landstar.com/news/press-releases/landstar-system-inc-announces-third-quarter-2025-charges [5]: Landstar System Inc. (2022). Form 10-Q. Retrieved from https://www.sec.gov/Archives/edgar/data/1408689/000119312522222110/d947380dex10q.htm
- Due to the jury's verdict regarding Landstar Ranger's role in a fatal 2021 road accident, which mandates a $3.42 million payout, the company's financials for the impending third quarter may see an alteration related to investing, as part of a $22.8 million total awarded damages.
- In light of Landstar Metro's underperformance, the decision to sell the Mexican subsidiary could lead to a charge of between $13 million and $17 million, impacting the third-quarter earnings, specifically in the area of business finance.
