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Expeditors Lags on Earnings & Revenues

Zacks Equity Research

Expeditors International of Washington Inc. (EXPD) reported third-quarter 2013 adjusted earnings of 45 cents per share, missing the Zacks Consensus Estimate of 48 cents. Earnings increased 7.1% from 42 cents in the prior-year quarter.

Total revenue nudged up 0.2% year over year to $1.54 billion but lagged the Zacks Consensus Estimate of $1.57 billion. Shareholders reacted negatively to the news and the stock fell 6.22% in Wednesday trade on Nasdaq.

Gross profit (net revenue) increased 3.6% year over year in the third quarter to $482.0 million. Gross margin (yield) was 31.4% compared with 30.4% in the prior-year quarter. Operating income rose 0.8% year over year to $146.3 million.

Revenue Segments

Airfreight Services revenues inched up 0.9% year over year to $628.1 million.

Ocean Freight and Ocean Services revenues decreased 4.4% year over year to $525.2 million.

Customs Brokerage and Other Services revenues increased 6.1% year over year to $381.8 million.


Expeditors exited the third quarter with operating cash flows of $96.3 million compared with $69.2 million in the year-ago quarter. At the end of the reported quarter, the company had cash and cash equivalents of $1.31 billion compared with $1.26 billion at the end of 2012.

Other Stocks

Another logistics company, C.H. Robinson Worldwide Inc. (CHRW), reported third-quarter results on Nov 5, 2013 after market close. The company’s adjusted earnings of 69 cents failed to beat the Zacks Consensus Estimate of 73 cents.

Currently, Expeditors carries a Zacks Rank #3 (Hold). Other stocks worth considering in this sector include Old Dominion Freight Line Inc. (ODFL) and Covenant Transportation Group Inc. (CVTI). Both these companies have a Zacks Rank #2 (Buy).

Our Analysis

For the long term, we believe Expeditors is poised for growth based on its strategic initiatives, superior business and growing supply chains. Continued strength in the airfreight business owing to growing trade between the U.S. and China also bodes well. Nevertheless, we remain cautious about weak consumer and business demand as well as delay in manufacturing, which might hurt the company’s revenues. Sluggish economic growth and higher freight rates charged by third party carriers are the other near-term headwinds for the company.

Read the Full Research Report on CHRW
Read the Full Research Report on EXPD
Read the Full Research Report on ODFL
Read the Full Research Report on CVTI

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