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On Thursday, Benchmark analyst Christopher Kuhn maintained a Hold rating on Landstar System (NASDAQ:LSTR) following the company’s fourth-quarter earnings report. Landstar reported earnings per share (EPS) of $1.31, which was consistent with Benchmark’s estimate and fell within the company’s guidance range of $1.25 to $1.45. The transportation company’s revenue for the quarter was $1.209 billion, reflecting a modest year-over-year increase of 0.4%, and was nearly in line with Benchmark’s projections. According to InvestingPro data, Landstar maintains strong financial health with a GOOD overall score, supported by robust cash flow and profitability metrics.
Despite revenue meeting expectations, Landstar’s variable contribution margin came in at 13.8%, slightly below the anticipated 14%. This was partially balanced by lower-than-expected operating expenses. The company’s Business Capacity Owners (BCO) count, representing its network of independent owner-operator truck drivers, continued to decline. Additionally, the operating income as a percentage of net revenue has decreased to levels last seen in 2009 and 2010. However, InvestingPro analysis shows the company maintains a healthy current ratio of 1.96, indicating strong ability to meet short-term obligations, with more cash than debt on its balance sheet.
The trucking firm faced a challenging environment with high truckload (TL) capacity and subdued demand, which led to a load growth of -3.4%, at the lower end of the forecasted range. However, revenue per truckload saw a 3.1% increase compared to the same quarter in the previous year, which was within the upper half of the guidance range.
Sequentially, truck revenue per load in the fourth quarter increased by 1% compared to the third quarter, aligning with the typical pre-pandemic seasonality patterns. For the first quarter of 2025, Landstar provided revenue and EPS guidance that fell below both Benchmark’s and FactSet’s estimates. Nevertheless, truck volumes and revenue per load are expected to follow normal seasonal trends.
Kuhn’s Hold rating reflects a view that Landstar’s current valuation, which is at the higher end of its historical ranges, already fairly incorporates the quality of the business and its robust balance sheet. This is set against a backdrop of continued lukewarm freight demand and an excess of capacity in the market. InvestingPro data supports this view, showing the stock trading at elevated multiples with a P/E ratio of 28.27 and currently trading near its Fair Value. InvestingPro subscribers have access to 12 additional key insights and a comprehensive Pro Research Report for deeper analysis of Landstar’s financial position and market outlook.
In other recent news, Landstar System, Inc. reported its fourth quarter earnings that fell short of analyst expectations, while its revenue slightly surpassed estimates. The transportation and logistics company posted earnings per share of $1.31, failing to meet the consensus estimate of $1.36. However, the company’s revenue stood at $1.21 billion, marginally exceeding analyst projections of $1.2 billion.
These recent developments show a marginal increase of 0.4% in Landstar’s fourth quarter revenue compared to the same period last year. Truck transportation revenue, which made up 89% of total revenue, saw a minor decline to $1.08 billion from $1.09 billion a year ago. For the full year of 2024, Landstar reported revenue of $4.82 billion, down from $5.30 billion in 2023, and net income of $195.9 million, compared to $264.4 million in the previous year.
The company’s board also declared a quarterly dividend of $0.36 per share, payable to shareholders of record as of February 18, 2025. These figures and announcements underline the most recent financial performance and actions of Landstar System, Inc.
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