Expeditors International Of Washington, Inc. EXPD reported a first-quarter fiscal 2024 revenue decline of 15% year-over-year to $2.206 billion, missing the consensus of $2.222 billion.
Airfreight tonnage volume increased by 4%, and ocean container volume increased by 2%. EPS of $1.17, down 19% YoY, beats the consensus of $1.06.
Operating income decreased 22% to $215 million, and the margin fell 91 bps to 9.7%.
EXPD generated $256.9 million in cash flow from operations and returned $361 million to shareholders via repurchases of common stock. The company repurchased 3 million shares at an average price of $120.17.
The company stated that its ocean market, in particular, remains muted and difficult to predict. Ocean capacity continues to grow, with an increase in the number of vessels coming on-line and out of sync with demand.
The air market is expanding capacity in response to strong passenger demand, especially for international travel, which has lowered air cargo rates and profit-per-kilo.
EXPD’s customs brokerage and other services business saw a year-over-year decline but showed sequential improvement despite fewer shipments, indicative of persistent softness in several served markets.
“We continue to adjust to an environment of soft rates and volatile demand. Salaries and related costs fell by 8%, primarily through decreased commissions and bonuses on lower revenues and operating income, again demonstrating how our variable compensation structure aligns with performance. We reduced headcount by 7%, largely through attrition, as we remain focused on aligning headcount with tonnage and volumes shipped,” stated Bradley S. Powell, Senior Vice President and Chief Financial Officer.
Price Action: EXPD shares are trading lower by 0.01% at $115.63 at the last check Tuesday.
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