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Landstar (LSTR) Up 4.6% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Landstar System (LSTR - Free Report) . Shares have added about 4.6% in that time frame, outperforming 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 Beat at Landstar in Q2

Landstar's earnings of $2.40 per share surpassed the Zacks Consensus Estimate of $2.34. The bottom line surged more than 100% year over year on higher revenues. The year-ago period was characterized by significant downturn in operations due to weak freight market conditions, thanks to the effects of coronavirus.

Revenues of $1,570.7 million also outperformed the Zacks Consensus Estimate of $1,497.4 million. The top line soared 90.7% year over year owing to strong performances of the truck transportation, rail intermodal, and ocean and air cargo carriers segments. During the second quarter, the company repurchased 150,000 shares for approximately $23.8 million.

Detailed Statistics

Gross profit (revenues excluding the cost of purchased transportation and commissions to agents) came in at $220.8 million in the reported quarter, up 95.2% year over year.

Operating income soared more than 200% from the prior-year quarter’s figure to $122.25 million. Total costs and expenses (on a reported basis) increased 82.9% to $1.45 billion.
 
Total revenues in the truck transportation segment — contributing 91.9% of the top line — amounted to $1.44 billion, up 91.7% from the year-ago quarter’s figure. Within the truck transportation segment, revenues hauled via van equipment rose more than 100% to $970.9 million. Truckload transportation revenues hauled via unsided/platform equipment climbed 79.6% to $444.3 million.

Less-than-truckload revenues increased 26.8% to $29.06 million. Overall second-quarter truck transportation revenue per load rose 38.4% year over year.

Rail intermodal revenues of $44.36 million increased 91.3% from the figure recorded in second-quarter 2020.  Revenues in the ocean and air cargo carriers segment surged 96.4% year over year to $60.24 million. Other revenues increased 34.3% to $21.93 million.

Liquidity

At the end of the second quarter, Landstar had cash and cash equivalents of $186.40 million compared with $249.35 million recorded at the end of 2020. Additionally, long-term debt (excluding current maturities) totaled $51.18 million at the end of the second quarter compared with $65.36 million at the end of 2020.

Q3 Outlook

Landstar anticipates revenues in the third quarter of 2021 to be in the range of $1.55-$1.60 billion. Earnings per share are estimated in the band of $2.20-$2.30.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month. The consensus estimate has shifted 10.77% due to these changes.

VGM Scores

Currently, Landstar has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

Landstar has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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