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Landstar (LSTR) Q3 Earnings Miss Estimates, Decline Y/Y

Zacks Equity Research

Landstar System’s LSTR earnings of $1.35 per share in third-quarter 2019 missed the Zacks Consensus Estimate by 9 cents. Moreover, the bottom line declined 17.2% on a year-over-year basis despite lower costs.

Revenues of $1,011.7 million too fell short of the Zacks Consensus Estimate of $1,025.5 million. The top line also decreased 15.8% year over year. Lower truck volumes and the resultant decline in truck revenues, mainly due to unfavorable market conditions, hampered results. Management on the conference call stated that the rate paid to truck brokerage carriers in the third quarter was 116 basis points, lower than the year-ago figure.

Gross profit (revenues excluding the cost of purchased transportation and commissions to agents) came in at $152.6 million in the reported quarter, down 10.9% year over year. Further, operating margin (operating income divided by gross profit) dipped to 46.3% from 50.8% in the prior year. Total costs and expenses (on a reported basis) declined to $942.3 million from $1.12 billion a year earlier.

Total revenues in the truck transportation segment — accounting for bulk (92.1%) of the top line — were $932.1 million, down 16.6%. Rail intermodal revenues of $28.97 million also fell 15.8%. Plus, ocean and air cargo carriers generated revenues of $30.36 million that slipped year over year. Meanwhile, other revenues augmented 11.1% to $20.1 million.

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Truckload transportation revenue hauled via van equipment in the reported quarter declined 19.8% to $575 million. Also, truckload transportation revenue hauled via unsided/platform equipment decreased 13.3% to $331.8 million. Moreover, revenue hauled by rail, air and ocean cargo carriers was $59.3 million in the third quarter, down 9.7% year over year. The overall third-quarter truck revenue per load too dropped 12.7% on a year-over-year basis.

Landstar System, Inc. Price, Consensus and EPS Surprise

 

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

Liquidity, Dividends and Buyback

At the end of the third quarter, this Zacks Rank #3 (Hold) company’s cash and cash equivalents were $284.43 million compared with $199.74 million at the end of December 2018. Additionally, long-term debt (excluding current maturities) totaled $61.39 million compared with $84.86 million at the end of last December. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Landstar has rewarded its shareholders with $109.16 million through dividends ($20.58 million) and buybacks ($88.57 million) on a year-to-date basis.

Q4 Outlook

The company expects truck revenue per load in the December quarter to fall in a high single-digit percentage range compared with the figure recorded in fourth-quarter 2018. Revenues in the ongoing quarter  are expected between $970 million and $1.02 billion. Management expects current-quarter earnings per share in the $1.40-$1.46 range. The Zacks Consensus Estimate for fourth-quarter earnings and revenues is pegged at $1.5 and $1.06 billion, respectively.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like Hertz Global Holdings, HTZ, Expeditors International of Washington EXPD and Air Lease Corporation AL. While Hertz will report third-quarter earnings numbers on Nov 4, Expeditors and Air Lease will announce the same on Nov 5 and Nov 7, respectively.

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Air Lease Corporation (AL) : Free Stock Analysis Report
 
Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
 
Landstar System, Inc. (LSTR) : Free Stock Analysis Report
 
Hertz Global Holdings, Inc (HTZ) : Free Stock Analysis Report
 
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