Landstar System Earnings: Here’s Why Shares are Up Now

Landstar System Inc. (NASDAQ:LSTR) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 0.81%.

Landstar System Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 13.16% to $0.66 in the quarter versus EPS of $0.76 in the year-earlier quarter.

Revenue: Decreased 7.75% to $679.34 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Landstar System Inc. reported adjusted EPS income of $0.66 per share. By that measure, the company met the mean analyst estimate of $0.66. It missed the average revenue estimate of $685.51 million.

Quoting Management: Landstar Chairman, President and CEO, Henry Gerkens said, “Revenue, gross profit margin, operating margin and diluted earnings per share in the 2013 second quarter were all in line with our recent expectations, as previously communicated in our 2013 second quarter mid- quarter update call on May 28, 2013. Consistent with the 2013 first quarter, the Company experienced softness in both the number of loads and revenue per load on loads hauled via truck throughout the second quarter with much of the softness coming from revenue hauled on unsided/platform equipment. Despite the soft operating environment, Landstar’s operating margin for the 2013 second quarter was a very solid 45.7 percent. In addition, our 2013 second quarter operating margin was negatively impacted by increased insurance and claims expense and an approximate $2 million in costs for Landstar’s Annual Agent Convention which was held in the 2013 second quarter as opposed to the first quarter of the prior year. The 2013 second quarter operating results, although not equal to the 2012 second quarter results, demonstrates the resiliency of our variable cost business model.”

Key Stats (on next page)…

Revenue increased 8.05% from $628.7 million in the previous quarter. EPS increased 15.79% from $0.57 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.78 to a profit $0.73. For the current year, the average estimate has moved down from a profit of $2.89 to a profit of $2.72 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)