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Landstar (LSTR) Beats on Q2 Earnings & Revenues, Ups Dividend

Zacks Equity Research
·5 mins read

Landstar System’s LSTR second-quarter 2020 earnings (excluding 35 cents from non-recurring items) of 98 cents per share beat the Zacks Consensus Estimate of 72 cents. However, the bottom line declined significantly year over year. Although revenues of $823.5 million surpassed the Zacks Consensus Estimate of $782.6 million, it plunged 21.2% year over year. Results were hurt by coronavirus-induced weak freight demand.

Detailed Statistics

Gross profit (revenues excluding the cost of purchased transportation and commissions to agents) came in at $113.1 million in the reported quarter, down 28.4% year over year.

Further, operating income fell 60.2% from the prior-year quarter’s figure to $32.18 million. Total costs and expenses (on a reported basis) declined 18% to $792.17 million.

Total revenues in the truck transportation segment — contributing 91.5% to the top line — amounted to $753.33 million, down 22.2% from the year-ago quarter’s figure. Within the truck transportation segment, truckload transportation revenues hauled via van equipment fell 20.2% to $483.02 million.  Also, truckload transportation revenues hauled via unsided/platform equipment declined 26.8% to $247.39 million.

Less-than-truckload revenues slipped 7.3% to $22.92 million. The overall second-quarter truck transportation revenue per load dropped 7.1% year over year.

Rail intermodal revenues of $23.19 million decreased 18.8% from the figure recorded in second-quarter 2019. Meanwhile, revenues in the ocean and air cargo carriers segment increased 8.6% year over year to $30.66 million. Other revenues declined 18.5% to $16.33 million.

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

At the end of the second quarter, Landstar, carrying a Zacks Rank #3 (Hold), had cash and cash equivalents of $245.47 million, compared with the $319.51 million recorded at the end of 2019. Additionally, long-term debt (excluding current maturities) totaled $60.15 million at the end of the second quarter, compared with $70.21 million at the end of 2019. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dividend Hike

The company’s board of directors has increased quarterly dividend by 13.5% to 21 cents per share (annualized 84 cents). The dividend is payable on Aug 28, to shareholders of record as of Aug 10.

During the second quarter, Landstar rewarded its shareholders with $7.1 million through dividend payouts.

Q3 Outlook

Landstar is seeing freight demand improve from the peak declines in April and May. The number of loads and revenue per load on loads hauled via trucks has increased from the April and May lows, but is still below-year ago levels. For the third quarter, Landstar expects the number of loads hauled via trucks to decline in mid-single-digit percentage range compared to that in the year-ago period. Third-quarter truck revenue per load is also anticipated to decrease in mid-single-digit percentage range from the third quarter of 2019. Revenues for the quarter are predicted in the range of $885-$935 million, while earnings per share are estimated between $1.11 and $1.17. The Zacks Consensus Estimate for third-quarter revenues stands at $846.53 million, while the same for earnings is pegged at 98 cents.

Sectorial Snapshot

Within the broader Transportation sector, Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and Kansas City Southern KSU recently reported second-quarter earnings numbers.

Delta, carrying a Zacks Rank #4 (Sell), incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share in the June quarter, wider than the Zacks Consensus Estimate of a loss of $3.97. Total revenues in the quarter came in at $1,468 million, surpassing the Zacks Consensus Estimate of $1,400.8 million.

J.B. Hunt, carrying a Zacks Rank #3, reported second-quarter earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million also beat the Zacks Consensus Estimate of $2,060.9 million.

Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 company’s total revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million.

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