Landstar System (NASDAQ:LSTR) Issues Earnings Results, Misses Estimates By $0.25 EPS

Landstar System (NASDAQ:LSTR) announced its quarterly earnings data on Tuesday. The transportation company reported $1.42 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $1.67 by ($0.25), FiscalAI reports. The company had revenue of $1.51 billion for the quarter, compared to analysts’ expectations of $1.50 billion. The company’s revenue for the quarter was up 25.4% compared to the same quarter last year. During the same period in the prior year, the company earned $1.22 earnings per share.

Here are the key takeaways from Landstar System’s conference call:

• Freight conditions improved materially: second-quarter revenue rose 18% year over year, truck revenue per load increased 17%, and truck volumes grew nearly 2%. Management said capacity tightened rapidly and transportation pricing began shifting in providers’ favor.
• Heavy haul remained a major growth driver, with revenue up 18% year over year to approximately $164 million, supported by 9% volume growth and an 8% increase in revenue per load. Management also cited continued strength across data-center, energy, aerospace, and defense-related demand.
• Profitability faced pressure from a challenging claims quarter, including $10.5 million of unfavorable prior-year claims development, largely tied to five claims. Variable contribution margin declined to 13.9% from 14.1%, while insurance, incentive compensation, technology, and equipment-related costs increased.
• Network trends improved, with 68 net BCO truck additions in the quarter, a lower trailing turnover rate of 28.3%, and another 49 net additions during the first four weeks of July. Management also reported an $18 million new agent signing and increased interest from small and midsized brokers following the Montgomery decision.
• Landstar declined to provide formal third-quarter guidance because of freight-market, geopolitical, litigation, and claims uncertainty. However, July truck volumes were approximately 5% above the prior year and revenue per load was about 26% higher, though management noted the volume outperformance was concentrated in the holiday-affected first week.

Landstar System Stock Down 15.0%

NASDAQ:LSTR opened at $143.41 on Wednesday. The stock’s 50 day moving average price is $172.65 and its 200 day moving average price is $176.75. The company has a market capitalization of $4.87 billion, a PE ratio of 37.92 and a beta of 0.90. Landstar System has a 52-week low of $121.11 and a 52-week high of $228.46.

Landstar System Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Tuesday, December 8th. Investors of record on Tuesday, November 17th will be given a $0.44 dividend. The ex-dividend date of this dividend is Tuesday, November 17th. This represents a $1.76 dividend on an annualized basis and a dividend yield of 1.2%. Landstar System’s dividend payout ratio is 45.60%.

Wall Street Analysts Forecast Growth

A number of brokerages recently commented on LSTR. Robert W. Baird lowered their target price on Landstar System from $215.00 to $195.00 and set an “outperform” rating for the company in a report on Wednesday. The Goldman Sachs Group upped their target price on shares of Landstar System from $147.00 to $168.00 and gave the stock a “sell” rating in a research note on Thursday, July 16th. Morgan Stanley reaffirmed an “underweight” rating and issued a $145.00 target price on shares of Landstar System in a report on Monday, July 6th. Wells Fargo & Company reduced their price objective on shares of Landstar System from $240.00 to $225.00 and set an “overweight” rating on the stock in a report on Tuesday, October 6th. Finally, JPMorgan Chase & Co. decreased their price objective on shares of Landstar System from $204.00 to $181.00 and set a “neutral” rating for the company in a research report on Monday, October 5th. Four equities research analysts have rated the stock with a Buy rating, twelve have assigned a Hold rating and two have given a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of “Hold” and a consensus target price of $191.07.

Key Landstar System News

Here are the key news stories impacting Landstar System this week:

• Positive Sentiment: Landstar reported third-quarter revenue of $1.512 billion, up 25% year over year and slightly ahead of the $1.50 billion consensus estimate. Gross profit increased 14%, while variable contribution rose 25%, indicating solid freight-volume and operating improvement. Landstar third-quarter results
• Positive Sentiment: The company declared a quarterly dividend of $0.44 per share, or $1.76 annualized, representing an approximately 1.0% yield. The dividend provides ongoing shareholder returns, although the ex-dividend date is November 17.
• Positive Sentiment: Robert W. Baird maintained an Outperform rating and lowered its price target from $215 to $195. Despite the reduction, the new target implies approximately 15.5% upside from the referenced price. Robert W. Baird rating

Landstar System Company Profile

Landstar System, Inc (NASDAQ: LSTR) is an asset-light transportation and logistics company headquartered in Jacksonville, Florida. Through a network of independent owner-operators, agents and third-party capacity providers, the company arranges the movement of freight for commercial and industrial customers.

Landstar’s services include truckload transportation, specialized and heavy-haul freight, expedited and time-critical shipping, less-than-truckload transportation, intermodal services and logistics management.