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Factors Likely to Influence Expeditors' (EXPD) Q1 Earnings

Zacks Equity Research

Expeditors International of Washington EXPD is slated to report first-quarter 2019 results on May 7, before market open. The Zacks Consensus Estimate for earnings and revenues is pegged at 85 cents and $1.96 billion, respectively.

In the last reported quarter, the company’s bottom-line surpassed the consensus mark by 17 cents. Results were aided by higher revenues and a lower effective tax rate. Volumes with respect to airfreight tonnage and ocean container increased 2% and 10%, respectively, on a year-over-year basis.

Furthermore, Expeditors has an impressive earnings surprise history, having surpassed the consensus estimate in each of the trailing four quarters, the average being 14.5%.

Expeditors International of Washington, Inc. Price and Consensus

 

Expeditors International of Washington, Inc. Price and Consensus | Expeditors International of Washington, Inc. Quote

 

Let’s delve deep to unearth the factors likely to shape this Seattle, WA-based third-party logistics provider’s first-quarter 2019 results.

In the to-be-reported quarter, we expect Expeditors’ top line to be hurt by sluggish freight shipments, just like another transport service provider —C.H. Robinson CHRW— that reported revenue decline in the first quarter. The downbeat freight scenario is quite evident from the fact that North American freight shipments have decreased in each of the three months of first-quarter 2019, according to the latest Cass Freight Shipments Index report.

At the Airfreight unit, the Zacks Consensus Estimate for first-quarter net revenues stands at $733 million, below $906 million reported in the fourth quarter of 2018.For Customs Brokerage and Other Services’ revenues, the same is pegged at $308 million, below $715 million registered in the last reported quarter. Meanwhile, for quarterly revenues at Ocean Freight and Ocean Services, the consensus mark is pinned at $550 million compared with $615 million in the final quarter of 2018.

Moreover, Expeditors’ high operating expenses primarily due to rise in labor expenses might affect bottom-line growth. With the company having substantial exposure in China, the US-China trade tensions might lower the volume of shipments and in turn, hamper overall results. However, lower tax rates should boost the bottom line in the soon-to-be-reported quarter.

What Does the Zacks Model Say?                                                                        

Our proven model does not predict an earnings beat for Expeditors in first-quarter 2019. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Expeditors has an Earnings ESP of -0.71% as the Most Accurate Estimate is pegged a penny below the Zacks Consensus Estimate.

Zacks Rank: Expeditors carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Upcoming Release

Investors interested in the Transportation Services industry are keenly awaiting the first-quarter 2019 earnings report of Hertz Global Holdings HTZ on May 6.

Key Pick

Investors interested in the broader Zacks Transportation sector may consider Ship Finance International Limited SFL as it possesses the right combination of elements to beat on earnings in its next quarterly release.

Ship Finance has an Earnings ESP of +7.69% and a Zacks Rank of 1.

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Ship Finance International Limited (SFL) : Free Stock Analysis Report
 
C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
 
Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
 
Hertz Global Holdings, Inc (HTZ) : Free Stock Analysis Report
 
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