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Landstar paying $2 special dividend after record 2021

Asset-light model continues to kick off cash

Landstar continues to return cash to shareholders through dividends and share repurchases (Photo: Jim Allen/FreightWaves)

Truck broker Landstar System announced it will be paying shareholders a special dividend of $2 per share for the third consecutive year in a press release issued after the market closed Wednesday. The company’s board also increased the share repurchase authorization to 3 million shares, up from the 1.1 million previously outstanding.

Landstar (NASDAQ: LSTR) has had quite the year in 2021. Through its network of nearly 100,000 truck capacity providers, the broker rode a hot freight market, which produced significant volume and revenue per load increases, to new record performances in each quarter of the year. Those records will likely extend to the fourth quarter as well.  

The company recently raised quarterly guidance for the last period of the year. It now expects revenue to be in the range of $1.85 billion to $1.9 billion (8.7% higher than the midpoint of the prior range) with earnings per share of $2.83 to $2.93 (10.8% higher than the previous guide).

Loads hauled by truck were up 20% to 22% year-over-year through the first eight weeks of the fourth quarter, which was higher than the prior expectation (+13% to +16%), and revenue per load was up by a high-teen percentage, which is at the high end of the prior range (+15% to +18%).

Landstar’s fourth-quarter consensus estimate was $2.63 at the time of the filing.

Assuming the updated outlook holds, it will post $6.5 billion in revenue during 2021 and be on the doorsteps of $10 per share in annual earnings, which is almost double the 2020 result.

At the close of the third quarter, Landstar had generated $217 million in cash flow from operations, a 17% year-over-year increase. Net cash stood at $170 million and debt to capital was 10%. The company’s significant cash flow generation, minimal maintenance capital expenditures outlay and clean balance sheet allow for robust cash deployment each year, which Landstar normally announces in December.

Prior to the recent $2 dividends, Landstar paid special dividends of $1.50 in 2017, $1 in 2014, 35 cents in 2013 and 50 cents in 2012.

In July, the company raised its regular quarterly dividend by 4 cents to 25 cents per share.

“Landstar’s strong balance sheet and free cash flow generation enables us to continue to return value to our stockholders through a significant increase to our stock purchase program coupled with a special dividend,” Jim Gattoni, president and CEO, stated in a press release.

The one-time cash payment will be disbursed on Jan. 21.

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  1. Lew Perry

    That’s all well and good, but how much “extra” money are they designating for their owner operators that helped them earn those revenues? Yea, about what I figured.

    So typical. all corporate American worries about keeping happy is the stock holders. Employee’s be damned.

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.