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Landstar (LSTR) Down 0.7% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Landstar System (LSTR). Shares have lost about 0.7% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Landstar due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Landstar Q4 Earnings Miss

Landstar System’s fourth-quarter 2022 earnings of $2.60 per share missed the Zacks Consensus Estimate of $2.62 and fell 13% year over year. The reported figure meets the lower end of the guided range of $2.60-$2.70.

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Revenues of $1,674.8 million missed the Zacks Consensus Estimate of $1,768.5 million and declined 13.9% year over year. The reported figure lies below the guided range of $1,775-$1,825 million.

Gross profit came in at $180.02 million in the reported quarter, down 14.3% year over year. Operating income fell 16.4% from the prior-year quarter’s figure to $124.33 million. Total costs and expenses (on a reported basis) decreased 13.7% to $1.55 billion.

Total revenues in the truck transportation segment — contributing to 91.5% of the top line — amounted to $1.53 billion, down 12.1% from the year-ago quarter’s figure. Rail intermodal revenues of $31.25 million decreased 20.7% from the figure recorded in fourth-quarter 2021.

Revenues in the ocean and air-cargo carrier segments declined 37.9% year over year to $83.83 million. Other revenues increased 2.1% to $26.09 million.

Liquidity, Dividends & Buyback

At the end of fourth-quarter 2022, Landstar had cash and cash equivalents of $339.58 million compared with $177.79 million recorded at the end of September 2022. Additionally, long-term debt (excluding current maturities) totaled $67.22 million at the end of the fourth quarter compared with $72.09 million at the end of September 2022.

Q1 Outlook

Landstar anticipates first-quarter 2023 revenues in the range of $1.40 billion to $1.45 billion. Earnings per share for the first quarter are estimated to be in the band of $2.05 to $2.15.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -8.54% due to these changes.

VGM Scores

At this time, Landstar has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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. Notably, Landstar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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