Why Is Landstar (LSTR) Up 6.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Landstar System (LSTR). Shares have added about 6.7% 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.
Landstar Q3 Earnings Beat
Landstar's third-quarter 2023 earnings per share (EPS) of $1.71 beat the Zacks Consensus Estimate by a penny but fell 38% year over year. Revenues of $1,289.34 million lagged the Zacks Consensus Estimate of $1,296.5 million but declined 29% year over year.
Operating income fell 39.8% from the prior-year quarter’s figure to $80.34million. Total costs and expenses (on a reported basis) decreased 27.9% to $1,212.01 million.
Total revenues in the truck transportation segment — contributing to 91% of the top line — amounted to $1.17 billion, down 26.5% from the year-ago quarter’s figure. Rail intermodal revenues of $23.06 million decreased 16.5% from the figure recorded in third-quarter 2022.
Revenues in the ocean and air-cargo carrier segments declined 59.9% year over year to $65.82 million. Other revenues increased 4.8% to $26.69 million.
Liquidity, Dividends & Buyback
At the end of third-quarter 2023, Landstar had cash and cash equivalents of $439.66 million compared with $360.52 million recorded at the prior-quarter end. Additionally, long-term debt (excluding current maturities) totaled $46.17 million at the end of the third quarter compared with $53.14 million at the second-quarter end.
LSTR is currently authorized to purchase up to 2,910,339 shares under its previously announced share purchase programs. LSTR’s board of directors has declared a quarterly dividend of 33 cents per share, payable on Dec 1, 2023, to stockholders of record as of the close of business on Nov 7.
Q4 Outlook
Landstar anticipates fourth-quarter 2023 revenues in the range of $1.225 billion-$1.275 billion. EPS for the fourth quarter is estimated to be in the band of $1.60-$1.70. LSTR expects fourth quarter effective income tax rate of 24.5%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -13.99% due to these changes.
VGM Scores
At this time, Landstar has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Landstar has a Zacks Rank #4 (Sell). We expect a below average 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, Knight-Swift Transportation Holdings (KNX), has gained 5.2% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Knight-Swift reported revenues of $2.02 billion in the last reported quarter, representing a year-over-year change of +6.5%. EPS of $0.41 for the same period compares with $1.27 a year ago.
For the current quarter, Knight-Swift is expected to post earnings of $0.48 per share, indicating a change of -52% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Knight-Swift. Also, the stock has a VGM Score of C.
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Landstar System, Inc. (LSTR) : Free Stock Analysis Report
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