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Landstar (LSTR) Stock Down on Q4 Earnings Miss, Y/Y Decline

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Landstar System’s LSTR fourth-quarter 2019 earnings of $1.27 per share missed the Zacks Consensus Estimate by 14 cents. Moreover, the bottom line declined 24.4% on a year-over-year basis, mainly due to lower revenues. Notably, revenues dipped 15.9% on a year-over-year basis to $994.9 million.

The top-line figure, however, surpassed the Zacks Consensus Estimate of $992.5 million. The lackluster bottom-line performance and the year-over-revenue decline resulted in the stock shedding 12.9% of its value in after-market trading on Jan 29.

Lower truck volumes and unfavorable pricing dented truck revenues, mainly due to unfavorable market conditions, thereby hurting results. Gross profit (revenues excluding the cost of purchased transportation and commissions to agents) came in at $148.68 million in the reported quarter, down 12% year over year.

Further, operating margin (operating income divided by gross profit) dipped to 44.7% from the prior year’s 51%. Total costs and expenses (on a reported basis) declined to $929.7 million from the $1.09 billion incurred in the prior-year period.

Total revenues in the truck transportation segment — accounting for bulk (91.7%) of the top line — were $911.8 million, down 15.4%. Within the truck transportation segment, truckload transportation revenue hauled via van equipment in the reported quarter fell 18.9% to $571.77 million. Also, truckload transportation revenue hauled via unsided/platform equipment decreased 9.1% to $315.2 million.

Less-than-truckload revenues went down 4.7% to $24.85 million. The overall fourth-quarter truck revenue per load too dropped 9.2% on a year-over-year basis.

Rail intermodal revenues of $30.75 million fell 6.7%. Moreover, revenues in the ocean and air cargo carriers segment plunged 37.9% to $32.22 million. Meanwhile, other revenues increased to $20.1 million.

At the end of 2019, this Zacks Rank #4 (Sell) company’s cash and cash equivalents were $319.51 million compared with the $199.74 million recorded at the end of December 2018. Additionally, long-term debt (excluding current maturities) totaled $70.21 million compared with $84.86 million at the end of 2018. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Landstar rewarded its shareholders with $116.46 million through dividends ($27.89 million) and buybacks ($88.57 million) in 2019. The company generated free cash flow of $288.42 million in the year.

Landstar System, Inc. Price, Consensus and EPS Surprise


Landstar System, Inc. Price, Consensus and EPS Surprise

Landstar System, Inc. price-consensus-eps-surprise-chart | Landstar System, Inc. Quote

Q1 Guidance

The company expects revenues between $915 million and $965 million for the March-end quarter. Management expects current-quarter earnings per share in the $1.10-$1.20 range (excluding the resolution of a fatal accident that occurred in January). The Zacks Consensus Estimate for first-quarter 2020 earnings per share and revenues is pegged at $1.34 and $941.18 million, respectively.

Upcoming Releases

Investors interested in the broader Transportation sector await fourth-quarter 2019 earnings reports from key players like Air Lease Corp. AL, Expeditors International of Washington EXPD and Hertz Global Holdings .

Air Lease and Expeditors will announce results on Feb 14 and Feb 18, respectively. Hertz will release fourth-quarter earnings numbers on Feb 24.

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