Landstar (LSTR) Third quarter results and revenues better, fourth quarter results upbeat

Landstar System, Inc. LSTR reported better-than-expected earnings and revenue in the third quarter of 2018. The company’s earnings were $1.63 per share, beating the Zacks Consensus Estimate of $1.60. Moreover, the financial result increased by 61.4% year on year.

Revenues were $1,202.1 million, slightly above the Zacks Consensus Estimate of $1,201.8 million. The value of revenues also increased by 27.4% year-on-year.

Gross profit (revenue excluding the costs of purchased transport and agent commissions) amounted to USD 171.3 million, up 22% compared to the year-ago period. Meanwhile, operating income increased 44% to $87.1 million. Additionally, total operating expenses increased 26.3% to $1.12 billion in the quarter.

Landstar System, Inc. Price, consensus and EPS surprise

Landstar System, Inc. Price, consensus and EPS surprise | Quote Landstar System, Inc

Segment results

Total revenues for the trucking segment – accounting for 93% of bulk revenues – were $1.12 billion, up 27.4%. Intermodal rail revenues amounted to $34.44 million, an increase of 42.2%. Other revenues increased 50.2% to $18.14 million.

Total truckloads increased 6.7% year-over-year to 522.85 million, driven by 7% growth in truckload equipment volumes and 5% growth in less than truckload and non-deck/platform equipment volumes. Additionally, freight by rail, ocean freight carriers and air carriers increased 25% to 21.64 million, primarily driven by a 21% increase in rail intermodal volume and a 46% increase in ocean volume.

Bullish forecasts for the fourth quarter

Landstar expects truck revenue per load to increase in the upper single-digit percentage range compared to the fourth quarter of 2017. Additionally, truckload volume is expected to increase approximately 8-10% year-over-year.

Fourth quarter revenues are estimated in the range of $1.180-1.230 billion, representing an increase of 12-17% compared to the fourth quarter of 2017. Additionally, earnings per share for the final quarter of 2018 are projected to be between 1.56 and 1. $62, up from $1.54 in the fourth quarter of 2017. The Zacks Consensus Estimate for fourth-quarter earnings is $1.60 per share on revenue of $1.22 billion.

Dividend

Landstar’s board of directors declared a quarterly cash dividend of 16.5 cents per share, payable to shareholders on December 7, as of November 13.

Liquidity and redemption

As of September 30, 2018, the Zacks Rank #3 (Hold) company had $213.97 million in net assets as of September 30, 2018, up from $242.42 million at the end of December 2017. Additionally, long-term debt (excluding current maturities) was this period USD 72.89 million compared to USD 83.06 million at the end of December. You can see see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming releases

Investors interested in the broader Zacks Transportation sector are eagerly awaiting third-quarter earnings reports from key players such as SkyWest, Inc. SKYW, CH Robinson Worldwide, Inc. CHRW and Triton International Limited TRTN. While SkyWest and CH Robinson will report third-quarter results on October 30, Triton International will release them on November 2.

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