Why Landstar System Stock Flopped on Friday

Logistics specialist Landstar System (NASDAQ: LSTR) wasn't looking like such a special company to investors as the trading week came to a close. Its share price decelerated by almost 4% on Friday on news of a reporting delay. That decline was particularly noticeable given that the benchmark S&P 500 index increased on the day, rising by 0.6%.

An uncomfortable delay

That morning Landstar announced that its first-quarter earnings release, scheduled for publication next Tuesday, April 29, has been shifted forward. The company said it will instead unveil those results on May 13, again a Tuesday. Accordingly, it will file an official notification of late filing with the U.S. Securities and Exchange Commission.

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By way of explanation, Landstar wrote in its press release on the matter that it "identified a supply chain fraud that does not involve its core North American truckload services." It did not elaborate on this somewhat alarming development, but said the delay was connected to evaluating its impact.

It also said that it will directly affect its fundamentals, although this damage shouldn't exceed a $15 million hit to net income. On a per-share basis, this amounts to $0.43.

Answers needed

As something of a stopgap, Landstar provided several figures for the quarter. Total revenue was slightly over $1.15 billion, while earnings per share -- not accounting for the mentioned impact of the fraud situation -- came in at $0.95. Both numbers were near the top end of management's guidance.

While it's comforting to a degree that Landstar was profitable, the mere mention of fraud rightfully spooks investors. They will be expecting a fuller explanation when those first-quarter results are published; tough questions are also likely to be posed in the conference call the company is holding to discuss the results.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Landstar System. The Motley Fool has a disclosure policy.