Expeditors Beats Estimates - Analyst Blog

Expeditors International of Washington's (EXPD), a third-party logistics provider, reported its adjusted third quarter earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate by 3 cents. Earnings per share shot up 63% year over year from 27 cents in the year-ago quarter driven by strong volumes.

Net income attributable to shareholders jumped 66% year over year to $96.1 million. Total revenue in the reported quarter was $1.7 billion, up 61% year over year, and was higher than the Zacks Consensus Estimate of $1.6 billion.

On an annualized basis, revenues in United States, Other North America, Latin America, Asia, Europe and Africa, Middle East and India, and Australia increased 47.4%, 38.4%, 22.9%, 83%, 30.9%, 37.3% and 14.6%, respectively, in the third quarter.

Gross profit increased 32% year over year to $458.7 million resulting in gross margin (yield) of 27.5%, down from 33.4% in the year-ago quarter. Operating income climbed 66% year over year to $159.6 million and operating expenses expanded 60.2% year over year to $1.5 billion.

Revenue Segments

Airfreight Services revenues leaped 64.3% year over year to $751.6 million.

Ocean Freight and Ocean Services revenues saw a whopping increase of 80.8% year over year to $559.3 million.

Customs Brokerage and Other Services revenues climbed 27.5% year over year to $316.7 million.

Liquidity

Expeditors' balance sheet remains solid with no debt and $1.1 billion in cash at the end of the third quarter, up from $947.3 million in the year-ago quarter.

Our Analysis

Expeditors'debt-free balance sheet, superior execution, productivity and efficiency gains as well as its ability to return cash to shareholders in the form of dividends make it attractive for investment. Over the long term, the company is poised for growth as it plans to expand its presence and operations internationally as well as invest in new opportunities and services. Hence, we are currently maintaining our Outperform recommendation with the Zacks # 2 (Buy) Rank.