Landstar slides after Q1 EPS guidance cut, flags supply-chain fraud probe

Landstar System

03/04/2025 15:03

** Landstar System's LSTR.O shares down 5.5% to $143.62 early Thurs after freight firm cut current qtr earnings guidance and said it identified a significant supply-chain fraud

** LSTR shares hit lowest since Nov 2022 amid broader market selloff after President Trump's latest tariffs salvo .N

** Jacksonville, Florida-based co in SEC filing late Weds lowered Q1 EPS forecast to $0.90-$0.95 from $1.05-$1.25. Analysts expected $1.11, per LSEG

** Co said the supply chain fraud does not involve its North American truckload services, adding that while investigation is preliminary, it believes the fraud may reduce Q1 EPS by $0.35- $0.50 due to impairment of a trade accounts receivable recorded on its Dec balance sheet, per the filing

** It expects insurance and claims costs to be elevated in the qtr due to cargo theft and truck accident claim development

** Truck revenue per load was below normal Feb to Mar seasonal patterns, while truck volume was in line with seasonality trends, co said

** Brokerages reduce PTs after the news: JP Morgan to $147 from $177, Truist to $150 from $160, TD Cowen to $145 from $161

** JPM, which rates LSTR 'neutral', said it is not sure if any peers will be similarly affected, but added it remains clear accident claims and cargo theft are still a major industry issue

** With move on Thurs, LSTR shares down ~15% YTD vs ~11% decline in the Dow Jones Transportation Avg .DJT

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))