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Why Is Landstar (LSTR) Up 2.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for Landstar System (LSTR - Free Report) . Shares have added about 2.6% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Landstar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Earnings Miss at Landstar in Q2

Landstar System’s second-quarter 2022 earnings of $3.05 per share missed the Zacks Consensus Estimate of $3.25. However, the bottom line surged 27% year over year. The reported figure lies below the guided range of $3.22 to $3.32.

Revenues of $1,975.1 million also missed the Zacks Consensus Estimate of $2,017.4 million. The top line soared 26% year over year.

Gross profit came in at $208.1 million in the reported quarter, up 19.1% year over year. Operating income surged 23% from the prior-year quarter’s figure to $150.42 million. Total costs and expenses (on a reported basis) increased 25.9% to $1.83 billion.

Total revenues in the truck transportation segment — contributing to 88.5% of the top line — amounted to $1.75 billion, up 20.9% from the year-ago quarter’s figure. Rail intermodal revenues of $43.4 million decreased 2.1% from the figure recorded in second-quarter 2021.  Revenues in the ocean and air-cargo carrier segments skyrocketed more than 100% year over year to $158.8 million. Other revenues increased 16.7% to $25.6 million.

Liquidity, Dividends & Buyback

At the end of the second quarter of 2022, Landstar had cash and cash equivalents of $78.22 million compared with $146.03 million recorded at the end of March 2022. Additionally, long-term debt (excluding current maturities) totaled $73.99 million at the end of the 2022 June quarter, compared with $137.29 million at the end of March 2022.

Concurrent with the earnings release, Landstar’s board of directors announced a dividend hike of 20%, thereby raising the quarterly cash dividend from 25 cents per share to 30 cents. The raised dividend will be paid on Aug 26, 2022, to stockholders of record at the closure of business on Aug 8, 2022.

During the reported quarter, Landstar purchased almost 703,000 shares for $103.3 million.

Outlook

Landstar anticipates third-quarter 2022 revenues in the range of $1.80-$1.85 billion. The Zacks Consensus Estimate of $1.76 billion lies below the guidance.

Earnings per share for the September quarter are estimated in the band of $2.75-$2.85. The Zacks Consensus Estimate for the same is currently pegged at $2.65 per share, which lies below the guidance.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Landstar has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Landstar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Landstar belongs to the Zacks Transportation - Truck industry. Another stock from the same industry, JB Hunt (JBHT - Free Report) , has gained 11.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.

JB Hunt reported revenues of $3.84 billion in the last reported quarter, representing a year-over-year change of +32%. EPS of $2.42 for the same period compares with $1.61 a year ago.

For the current quarter, JB Hunt is expected to post earnings of $2.43 per share, indicating a change of +29.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for JB Hunt. Also, the stock has a VGM Score of A.


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