Landstar (LSTR) Q1 Earnings Top Estimates, Revenues Miss Mark

Landstar System, Inc. (NASDAQ:LSTR) reported mixed results in the first quarter of 2019. The company’s earnings came in at $1.58 per share, surpassing the Zacks Consensus Estimate of $1.52. Moreover, the bottom line rose 15.3% year over year.

Revenues totaled $1,033 million, falling below the Zacks Consensus Estimate of $1,050.9 million. Also, the top line slipped 1.4% year over year, primarily due to soft truck pricing.

Gross profit (revenues excluding the cost of purchased transportation and commissions to agents) of $155.6 million increased slightly from the year-ago quarter. Additionally, operating income rose 7.6% to $80.9 million. Meanwhile, total operating expenses decreased 2.1% to $953.24 million in the quarter under review.

Segmental Results

Total revenues in the truck transportation segment — accounting for bulk (92.3%) of the top line — were $953.11 million, down 2.7%. Rail intermodal revenues were $30.02 million, up 2.5%. Meanwhile Ocean and air cargo carriers generated revenues of $30.67 million, up 30.6%. Other revenues augmented 19.5% to $19.21 million.

Total number of loads hauled by trucks inched up 2% year over year to 502. 3 million, courtesy of a 1% volume expansion through van equipment and a 6% and 4% rise in less-than-truckload volumes and unsided/platform equipment volumes, respectively. While loads hauled via railroads declined 6.2%, the same on ocean and air cargo carriers climbed 18.6%.

Liquidity and Buyback

At the end of the first quarter, this Zacks Rank #3 (Hold) company’s cash and cash equivalents were $264.63 million compared with $199.74 million at the end of December 2018. Additionally, long-term debt (excluding current maturities) totaled $75.25 million in the period 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.

During the first quarter, Landstar bought back 124,481 shares for $13 million. Under the current buyback program, the company is authorized to purchase approximately 1.9 million shares.

Dividend

Landstar’s board cleared a quarterly cash dividend of 16.5 cents per share, payable May 31, 2019 to shareholders of record as of May 9.

Q2 Outlook

Total number of loads hauled via truck in the second quarter of 2019 is expected to be commensurate with that in second-quarter 2018. With truck prices expected to remain under pressure due to increase in truck capacity, the company anticipates second-quarter truck revenue per load to be in high single-digit percentage range, lower than that achieved in the second quarter of 2018. Revenues in the quarter are projected to be between $1.075 billion and $1.125 billion. Additionally, earnings in the quarter are estimated in the range of $1.56-$1.62 per share compared with $1.51 a year ago. The mid-point, $1.59, of the guided range is below the Zacks Consensus Estimate of $1.60. The consensus mark for revenues stands at $1.17 billion.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting first-quarter earnings reports from key players, such as Expeditors International of Washington, Inc. (NASDAQ:EXPD) , C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) and Air Lease Corporation (NYSE:AL) . While C.H. Robinson will report first-quarter earnings on Apr 30, Expeditors and Air Lease will announce the same on May 7 and May 9, respectively.

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