LSTR earnings analysis
What we found in LSTR's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Landstar delivered a strong top-line recovery in Q2, with revenue up 18% year over year to $1.432 billion as truck revenue per load rose 17%; diluted EPS increased 20% to $1.44 but missed the $1.47 consensus estimate. Gross margin expanded 20 basis points to 9.2%, while operating margin held near flat at 4.6% as higher insurance/claims and incentive compensation offset scaling benefits. Liquidity remains ample and debt declined, but operating cash flow fell by $35.0 million year over year due to higher net receivables, while the updated broker-liability risk and elevated insurance costs remain material headwinds.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue accelerated 18% year over year
- Q2 revenue rose $220.9 million, or 18%, year over year to $1.432 billion, driven by a 16% increase in revenue per load and a 2% increase in loads. Revenue was also 22% above Q1 2026 revenue of $1.171 billion.
- Truck pricing drove the quarter
- Truck transportation revenue increased $215.7 million, or 19%, to $1.334 billion, representing 93% of consolidated revenue. Truck revenue per load rose approximately 17%, with van, unsided/platform and LTL revenue per load up 16%, 20% and 32%, respectively.
- Gross profit expanded; operating leverage muted
- Gross profit increased $23.1 million to $132.3 million and gross margin expanded 20 basis points to 9.2% from 9.0%. Operating income increased $9.9 million, or 18%, to $66.2 million, although operating margin was essentially flat at 4.6% versus 4.6% a year earlier.
- EPS grew YoY but missed consensus
- Diluted EPS increased 20% year over year to $1.44 from $1.20 and rose from $1.16 in Q1 2026. However, the reported $1.44 was below the $1.47 consensus estimate.
- Liquidity and leverage remain sound
- Working capital increased $76.6 million to $597.1 million and the current ratio improved to 1.8x from 1.7x at year-end. Long-term debt including current maturities fell $10.0 million to $66.8 million, with no revolver borrowings outstanding.
- Credit facility extended through 2031
- The new credit agreement matures June 30, 2031 and provides a $300.0 million revolver plus an uncommitted $500.0 million accordion. At June 27, available revolver capacity was $265.1 million after $34.9 million of letters of credit.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- New broker-liability exposure risk
- The updated risk factor cites the May 14, 2026 Montgomery decision narrowing FAAAA preemption defenses for broker-liability claims; industry peers have subsequently faced Nuclear Verdicts exceeding $100 million. Landstar warns insurance and third-party recoveries may be insufficient for a substantial verdict or settlement.
- Claims development pressured Q2 costs
- Q2 insurance and claims expense increased $8.9 million year over year, driven in part by $10.5 million of net unfavorable development of prior-years' claims, versus $2.3 million in the prior-year quarter. Management also cited higher severity of current-year trucking claims.
- Insurance pricing and retained-loss exposure
- Excess commercial-auto insurance premiums have risen approximately $21 million, or 390%, from the policy year ended April 30, 2020 to the policy year ending May 31, 2027. For a hypothetical $65 million claim in that policy year, Landstar estimates aggregate financial exposure of approximately $33 million.
- Receivables reduced operating cash flow
- Operating cash flow fell to $27.8 million in the first 26 weeks of 2026 from $62.8 million a year earlier, as increased net receivables created unfavorable working-capital effects despite higher net income. Operating-property purchases were $8.7 million in the period.
- Tighter capacity raises procurement costs
- Available truck capacity providers declined to 72,326 at June 27, 2026 from 77,358 a year earlier, including active truck brokerage carriers declining to 37,656 from 41,842. A tighter capacity market supported pricing but also lifted purchased transportation to 78.4% of Q2 revenue from 77.7%.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.44
- Gross margin
- 9.2%
- Operating margin
- 4.6%
- Segment
- Transportation logistics external revenue: $1.418 billion (derived as $1.432 billion consolidated revenue less $14.499 million reinsurance premiums); +18% YoY transportation-revenue growth
- Segment
- Insurance segment reinsurance premiums: $14.499 million, down from $14.696 million (-1% YoY)
What they said about what is next.
The 10-Q provides no quantitative revenue or EPS outlook. Management anticipates acquiring approximately $105.0 million of operating property during the remainder of fiscal 2026, primarily replacement trailing equipment and IT hardware/software, through purchases or leases.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 29, 2026
- Landstar System, Inc. reported Q1 2026 revenue of $1,171,291,000, exceeding estimates of $1,162,118,840, and delivered an EPS of $1.16, beating the forecast of $1.12. The company's gross profit showed significant…
- 10-K · February 24, 2026
- Landstar presents itself as a technology-enabled, asset-light integrated transportation management provider with revenue of $4.7 billion in fiscal 2025, leveraging a large agent and third‑party capacity network. The…
- 10-K · February 24, 2025
- Landstar positions itself as a technology-enabled, asset-light integrated transportation management provider with revenue of $4.8 billion in the most recently completed fiscal year and a competitive moat anchored in its…
- 10-Q · October 30, 2024
- Landstar reported Q3 revenue of $1,213,867,000 and diluted EPS of $1.41. Revenue, operating income and net income declined year-over-year (revenue down $75,478,000; operating income down $17,232,000; net income down…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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