Landstar System, Inc. LSTR reported mixed results in the fourth quarter of 2018. The company’s earnings came in at $1.68 per share, surpassing the Zacks Consensus Estimate of $1.58. Moreover, the bottom line rose substantially year over year.
Revenues totaled $1,182.4 million, falling below the Zacks Consensus Estimate of $1,214.6 million. However, the top line improved 12.4% year over year.
Gross profit (revenues excluding the cost of purchased transportation and commissions to agents) of $168.9 million increased 13% from the year-ago period. Additionally, operating income jumped 23% to $86.1 million. Meanwhile, total operating expenses escalated 11.7% to $1.1 billion in the quarter under review.
Landstar System, Inc. Price, Consensus and EPS Surprise
Landstar System, Inc. Price, Consensus and EPS Surprise | Landstar System, Inc. Quote
Segmental Results
Total revenues in the truck transportation segment — accounting for bulk (91.1%) of the top line — were $1.08 billion, up 11.4%. Rail intermodal revenues were $32.95 million, up 18.3%. Other revenues augmented 24.2% to $19.89 million.
Total number of loads hauled by trucks increased 4.2% year over year to 519.55 million, courtesy of a 4% volume expansion through van equipment and a 13% and 3% rise in less-than-truckload volumes and unsided/platform equipment volumes, respectively. While loads hauled via railroads dipped 1.5%, the same on ocean and air cargo carriers climbed 6.2%.
Liquidity and Buyback
At the end of the fourth quarter, this Zacks Rank #3 (Hold) company had $199.74 million in cash and cash equivalents compared with $242.42 million at the end of December 2017. Additionally, long-term debt (excluding current maturities) totaled $84.86 million in the period compared with $83.06 million at December-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
During the fourth quarter, Landstar bought back 1 million shares for $102.6 million. For the full year, it bought back 2 million shares worth approximately $208.1 million.
Apart from the current program to buy back up to 2 million shares, the company’s board has authorized to purchase an additional 1 million shares.
Dividend
Landstar’s board cleared a quarterly cash dividend of 16.5 cents per share, payable Mar 15, 2019 to shareholders of record as of Feb 18.
Q1 Outlook
The company anticipates the number of loads hauled via truck to grow in low single-digit percentage range during first-quarter 2019 compared to that in the first quarter of 2018. However, revenue per load on loads hauled via truck is anticipated to decrease in low single-digit percentage range year over year. Revenues in the period are estimated between $1.025 billion and $1.075 billion. Meanwhile, earnings per share are forecast in the band of $1.51-$1.57. The Zacks Consensus Estimate for first-quarter 2019 earnings stands at $1.44 on revenues of $1.11 billion.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting fourth-quarter earnings reports from key players, such as Expeditors International of Washington, Inc. EXPD, Old Dominion Freight Line, Inc. ODFL and Air Lease Corporation AL. While Old Dominion will release fourth-quarter results on Feb 7, Expeditors and Air Lease will report the same on Feb 19 and Feb 21, respectively.
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