Good afternoon, and welcome to Landstar System's second mid-quarter 2014 conference call. All lines will be in a listen-only mode. Today's call is being recorded. If you have any objections, you may disconnect at this time. Joining us today from Landstar is Mr. Henry Gerkens, Chairman and Chief Executive Officer. Sir, you may begin.
Thanks, Carolyn. Good afternoon, and welcome to the Landstar 2014 Q2 mid-quarter update conference call. As a reminder, let me review how our mid-quarter update call works. There is no question-and-answer period during this call. The purpose of the call is to provide a brief update on how management sees the current quarter shaping up as it relates to business levels and earnings projections. The call will be very brief and last only several minutes. Before we start, let me read the following statement. The following is a safe harbor statement under the Private Securities Litigation Reform Act of 1995. Statements made during this conference call that are not based on historical facts are forward-looking statements. During this conference call, I may make certain statements containing forward-looking statements, such as statements which relate to Landstar's business objectives, plans, strategies, and expectations.
Such statements are, by nature, subject to uncertainties and risks, including but not limited to, the operational, financial, and legal risks detailed in Landstar's Form 10-K for the 2013 fiscal year, described in the section Risk Factors and other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements, and Landstar undertakes no obligation to publicly update or revise any forward-looking statements.
During our Q1 2014 earnings conference call, I stated that I anticipated that revenue for the 2014 Q2 would be in a range of $750 million-$800 million versus 2013 Q2 revenue of $674 million, and that 2014 Q2 earnings per diluted share was estimated to be in a range of 73-78 cents per diluted share versus 2013 Q2 diluted earnings per share of 64 cents per share. Landstar has now completed the first two months of the 2014 Q2.
Revenue generated in the first two fiscal months of the 2014 Q2 continues to be well above the revenue generated in the first two months of the 2013 Q2, and as such, I remain very comfortable with the previously announced range of revenue guidance, with a strong bias towards the upper end of that range. As a refresher, for those of you still having difficulty understanding the Landstar model, here is a brief refresher course. Every piece of transportation revenue Landstar generates has a purchased transportation and agent commission component. As revenue increases, so will those two cost components. The difference between revenue and the sum of purchased transportation and agent commissions is referred to as Landstar's gross profit. Landstar's objective is to increase gross profit dollars and drop a significant percentage of that increase in gross profit dollars to operating income.
That's where Landstar obtains its operating leverage. Also remember that approximately 60% of Landstar revenue is generated on a fixed gross margin percentage, which in a tight capacity environment and rising customer pricing environment, greatly favors Landstar's ability to increase gross profit dollars. Assuming 2014 Q2 revenue is in the upper portion of the range of revenue guidance, and that the mix of fixed gross profit revenue and variable gross profit revenue remains consistent with that of the mix experienced in the first two months of the quarter, I would currently anticipate gross profit dollars generated in the 2014 Q2 to increase in a low-teen range over the gross profit dollars generated in the 2013 Q2.
Based on those revenue and gross profit assumptions, and assuming, 1, insurance and claims expense for the 2014 Q2 is at the 5-year historical average of 3.5% of BCO-generated revenue, and 2, an increase in anticipated management incentive compensation expense for the 2014 Q2 due to stronger than targeted results, I remain very comfortable with the previously announced range of diluted earnings per share guidance, with a bias towards the middle to upper end of that range. Landstar continues to operate on all cylinders. Pricing remains strong as available capacity remains relatively tight, and yet our available capacity base continues to grow. Our pipeline of new agent prospects remains strong, and I anticipate further market share gains as we move throughout 2014.
Additionally, current economic forecasts indicate industrial production will increase in the back half of the year, which will only further benefit Landstar. $3 billion in 2014 annual revenue is clearly within our reach. Thank you for dialing in, and I look forward to talking to you again on our July 23 Q2 earnings conference call. Thanks.
Thank you for joining the conference call today. Have a good day.