Landstar System plans sale of Mexican unit and records impairment charges

Landstar System Inc. (NASDAQ:LSTR), a $4.5 billion transportation and logistics company with annual revenues of $4.8 billion, announced Monday that it has begun actively marketing its Mexican subsidiary, Landstar Metro, S.A.P.I. de C.V., for sale or other strategic alternatives as part of an annual strategic review. According to InvestingPro data, the company maintains a strong financial position with more cash than debt on its balance sheet and a healthy current ratio of 2.0. The company has engaged a financial advisor to assist with the process, which may include a full or partial sale of Landstar Metro during the 2025 fiscal year.

Landstar Metro, established in 2017 following the acquisition of Fletes Avella, S.A. de C.V.’s logistics business, provides freight and logistics services in Mexico and supports Landstar’s U.S./Mexico cross-border operations. As of June 28, 2025, the carrying value of Landstar’s investment in the subsidiary was approximately $26 million.

In connection with the decision to market Landstar Metro, Landstar expects to record a non-cash impairment charge to goodwill and other assets of approximately $13 million to $17 million, or $0.28 to $0.37 per share, in the third quarter of 2025. Despite these charges, InvestingPro analysis shows the company’s strong cash flows can sufficiently cover its obligations, with the stock currently trading near its 52-week low, presenting a potential opportunity for investors. The company stated that additional charges and expenses related to the sale process or final disposition may occur.

The strategic review also led Landstar to determine that its Landstar TMS platform will be the primary transportation management system for servicing the truckload brokerage contract services market, resulting in the wind-down of its Blue TMS platform. Landstar will record a $9.0 million non-cash impairment charge, or $0.20 per share, in the third quarter related to this decision.

Additionally, Landstar intends to record up to a $5.0 million non-cash impairment charge, or $0.11 per share, in the third quarter for its minority equity investment in Cavnue, LLC, a company focused on technology for connected and autonomous vehicles.

In a separate matter, a jury verdict was rendered August 6 in a Texas state court case involving a vehicular accident from December 2021. The verdict attributed 15% of the $22.8 million total monetary damages, or $3.42 million, to Landstar Ranger, Inc., a wholly-owned subsidiary of Landstar System , with the remainder attributed to other parties. Both parties may file post-trial motions or appeals. Landstar does not anticipate changes to its previously recorded accrual related to this matter.

This information is based on a statement in a filing with the Securities and Exchange Commission. For investors seeking deeper insights, InvestingPro offers comprehensive analysis of Landstar’s financial health, including 8 additional ProTips and detailed metrics in its Pro Research Report, which transforms complex Wall Street data into actionable intelligence for smarter investing decisions.

In other recent news, Landstar System reported its second-quarter 2025 earnings, with an earnings per share (EPS) of $1.20, surpassing the consensus expectation of $1.17. Despite this EPS beat, revenue was $1.211 billion, reflecting a 1.1% decline year-over-year. Stifel maintained its Hold rating on Landstar System but adjusted its price target from $140.00 to $131.00 following the earnings report. UBS also revised its price target for the company, lowering it from $154.00 to $149.00, based on a revised 2026 EPS estimate of $6.20. Benchmark reiterated its Hold rating on Landstar System, acknowledging the company’s better-than-expected earnings performance. These developments indicate ongoing analyst evaluations of Landstar System’s financial outlook.

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