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Why Is Expeditors International (EXPD) Up 0.1% Since Last Earnings Report?

It has been about a month since the last earnings report for Expeditors International (EXPD). Shares have added about 0.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Expeditors International due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Earnings Beat at Expeditors in Q2

Expeditors’ second-quarter 2022 earnings of $2.27 per share surpassed the Zacks Consensus Estimate of $2.09. The bottom line increased 23.3% year over year. Total revenues of $4,603.3 million surpassed the Zacks Consensus Estimate of $4,469.4 million and also increased 28% year over year. Higher revenues across all segments boosted the top line.

Airfreight tonnage and ocean container volumes decreased 17% and 11%, respectively. Operating income increased 23.2% to $506 million in the second quarter on the back of higher revenues. Total operating expenses escalated 21.9% to $4.09 billion. Due to the February cyberattacks, EXPD incurred $6 million toward costs in the June quarter for recovering its operational and accounting systems and enhancing its cybersecurity protection.

Per Jeffrey S. Musser, president and CEO of EXPD, “This was the strongest second quarter in our company’s history, even while our air and ocean volumes were soft compared to a year ago. During the second quarter, we continued the recovery from the February cyber-attack and re-established digital connections with many of our customers, which limited our ability to move cargo through our systems. We also experienced a significant drop in volumes in China due to the various lockdowns that resulted in factories not operating and cargo being unavailable to ship.”

Airfreight Services revenues increased 5.2% year over year to $1.6 billion in the second quarter. Ocean Freight and Ocean Services revenues skyrocketed more than 60% to $1.76 billion. Customs Brokerage and Other Services revenues climbed 25.7% year over year to $1.24 billion.

During the second quarter of 2022, Expeditors repurchased $5 million shares at $109.81 per common share. EXPD exited the June quarter with cash and cash equivalents of $1.98 billion compared with $1.73 billion at the end of 2021.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 10.69% due to these changes.

VGM Scores

Currently, Expeditors International has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Expeditors International has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Expeditors International is part of the Zacks Transportation - Services industry. Over the past month, C.H. Robinson Worldwide (CHRW), a stock from the same industry, has gained 4.5%. The company reported its results for the quarter ended June 2022 more than a month ago.

C.H. Robinson reported revenues of $6.8 billion in the last reported quarter, representing a year-over-year change of +22.9%. EPS of $2.67 for the same period compares with $1.44 a year ago.

C.H. Robinson is expected to post earnings of $2.14 per share for the current quarter, representing a year-over-year change of +15.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.1%.

C.H. Robinson has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.


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