It has been about a month since the last earnings report for Expeditors International (EXPD) . Shares have added about 3.3% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.How Have Estimates B ...

Core Viewpoint - Expeditors International of Washington, Inc. (EXPD) has announced a 5.5% increase in its quarterly cash dividend, raising it from 73 cents to 77 cents per share, reflecting the company's commitment to enhancing shareholder returns [1] Group 1: Dividend Increases - The recent dividend hike will be paid on June 16, 2025, to shareholders of record as of June 2 [1] - In May 2022, EXPD raised its semi-annual cash dividend by 15.5% to 67 cents per share, and in 2023, it increased the dividend by 3% from 67 cents to 69 cents [2] Group 2: Shareholder Returns - In 2022, EXPD rewarded shareholders with cash dividends totaling $213.79 million and share repurchases amounting to $1,581.908 million [2] - The management's decision to raise the dividend indicates strong confidence in the company's business outlook and commitment to shareholder value [4] Group 3: Investment Considerations - Dividend-paying stocks like EXPD provide a steady income stream and typically exhibit less price volatility, making them attractive for investors seeking to hedge against economic uncertainty [3] - Actions to enhance shareholder value, such as dividend increases, are believed to strengthen investor confidence and support long-term stock performance [4]

Revenue and Expenses - In Q1 2025, airfreight services revenues increased by 19% to $901.76 million, while expenses rose by 21% to $648.49 million, driven by a 9% increase in tonnage and 11% and 12% increases in average sell and buy rates respectively [72][73]. - Ocean freight services revenues surged by 37% to $781.67 million, with expenses increasing by 39% to $573.90 million, reflecting strong demand and higher rates [72]. - Customs brokerage and other services revenues grew by 12% to $982.99 million, with expenses rising by 15% to $554.28 million, indicating robust performance across all service categories [72]. - Ocean freight and ocean services revenues increased by 37% to $X million, while expenses rose by 39% to $Y million for the three months ended March 31, 2025, compared to the same period in 2024 [77]. - Ocean freight consolidation revenues and expenses increased by 50% and 48%, respectively, for Q1 2025, primarily due to a 39% increase in average sell rates and an 8% increase in containers shipped [78]. - North and South Asia ocean freight revenues increased by 43% and 73%, respectively, while expenses rose by 44% and 80% for Q1 2025 compared to a weak Q1 2024 [79]. - Customs brokerage and other services revenues increased by 12% to $A million, and expenses increased by 15% to $B million for Q1 2025, driven by higher shipment volumes in North America and Europe [82]. Income and Earnings - Operating income for Q1 2025 reached $265.86 million, a 24% increase compared to $214.78 million in Q1 2024 [72]. - Net earnings attributable to shareholders increased by 20% to $203.80 million, up from $169.15 million in the same quarter last year [72]. - Total bonuses to management increased by 31% in Q1 2025 compared to the same period in 2024, primarily due to higher operating income [87]. Cash Flow and Investments - Cash from operating activities was $343 million, up from $257 million in Q1 2024, demonstrating improved cash flow generation [63]. - Net cash provided by operating activities for Q1 2025 was $343 million, an increase of $86 million compared to $257 million in Q1 2024, primarily due to higher net earnings [96]. - Cash used in investing activities for Q1 2025 was $13 million, up from $10 million in the same period in 2024, primarily for capital expenditures [100]. - The company returned $177 million to shareholders through common stock repurchases, reflecting a commitment to shareholder value [63]. Trade and Market Conditions - The termination of the "de minimis exemption" for low-value goods from China and Hong Kong may impact future trade flows and revenue patterns [62]. - The company faces an unpredictable environment due to ongoing tariff changes and trade restrictions, which could affect future performance [62][66]. - Tonnage increased significantly on exports from South Asia and North Asia, driven by technology customer demand, with elevated tonnage in Q1 2025 as shippers front-loaded deliveries in anticipation of higher tariffs [74]. Foreign Exchange and Financial Position - An average 10% weakening of the U.S. dollar would increase operating income by approximately $16 million, while a 10% strengthening would reduce it by approximately $13 million for the three months ended March 31, 2025 [108]. - For the three months ended March 31, 2025, net foreign currency transactional losses were approximately $5 million, compared to gains of approximately $7 million during the same period in 2024 [109]. - As of March 31, 2025, borrowings under international unsecured bank lines of credit amounted to $32 million, with contingent liabilities of $72 million from standby letters of credit and guarantees [104]. - Cash and cash equivalents held by non-United States subsidiaries totaled $561 million, with $11 million in U.S. banks as of March 31, 2025 [105]. - At March 31, 2025, cash and cash equivalents were $1,319 million, with $707 million invested at various short-term market interest rates [110]. - The company had no long-term debt as of March 31, 2025, indicating a strong liquidity position [110]. - Foreign exchange risks are primarily related to currencies such as Chinese Yuan, Indian Rupee, Euro, and others, impacting earnings due to intercompany transactions [106]. - The translation of foreign subsidiaries' non-U.S. dollar financials results in cumulative translation adjustments affecting shareholders' equity [107]. - Management reported no material change in interest rate risk exposure in the first quarter of 2025, with a hypothetical 10 basis points change having a negligible impact on earnings [110]. Expenses and Overheads - Other overhead expenses increased by 14% or $20 million for Q1 2025, primarily due to technology-related expenses and increased consulting costs [89]. - The consolidated effective income tax rate was 26.0% for Q1 2025, down from 26.9% in Q1 2024, benefiting from U.S. income tax deductions [91]. Intercompany Transactions - The majority of intercompany billings are resolved within 30 days, with approximately $203 million of net unsettled intercompany transactions as of March 31, 2025 [109].

Core Insights - Expeditors International of Washington (EXPD) reported first-quarter 2025 earnings of $1.47 per share, exceeding the Zacks Consensus Estimate of $1.30, with a year-over-year increase of 26% driven by strong air tonnage and ocean volumes [1] - Total revenues reached $2.66 billion, surpassing the Zacks Consensus Estimate of $2.42 billion, marking a 20.8% year-over-year growth [1] Financial Performance - Operating income increased by 24% year over year to $265.85 million, with total operating expenses rising by 20.5% to $2.40 billion [2] - Airfreight services revenues grew by 18.7% year over year to $901.76 million, while ocean freight and services revenues surged by 36.9% to $781.66 million [3] - Customs Brokerage and other services revenues increased by 12.1% year over year to $982.99 million [3] Operational Efficiency - The company maintained an operating efficiency measure in line with its 30% target, with pre-tax operating income growing by 24% from the previous year [2] - Airfreight tonnage and ocean container volume increased by 9% and 8% year over year, respectively [2] Shareholder Actions - During the first quarter of 2025, EXPD repurchased 1.5 million shares at an average price of $117.29 per share [3] Cash Position - At the end of the first quarter, EXPD had cash and cash equivalents of $1.32 billion, up from $1.15 billion at the end of the previous quarter [4]

Financial Performance - Diluted earnings per share (EPS) increased by 26% to $1.47 compared to the same quarter of 2024[6] - Net earnings attributable to shareholders rose by 20% to $204 million, while operating income increased by 24% to $266 million[6] - Revenues grew by 21% to $2.7 billion, driven by increased airfreight tonnage (up 9%) and ocean container volume (up 8%) year-over-year[6] - Total revenues for Q1 2025 reached $2,666,419, an increase of 20.8% compared to $2,206,678 in Q1 2024[18] - Net earnings for Q1 2025 were $204,099, representing a 19.7% increase from $170,400 in Q1 2024[20] - Diluted earnings per share increased to $1.47 in Q1 2025, up from $1.17 in Q1 2024, reflecting a growth of 25.6%[18] - Operating income for Q1 2025 was $265,858, a 23.7% increase from $214,776 in Q1 2024[18] Cash Flow and Investments - The company generated $343 million in cash from operations and returned $177 million to shareholders through stock repurchases during the quarter[8] - Net cash from operating activities for Q1 2025 was $342,622, an increase of 33.4% from $256,904 in Q1 2024[20] - Cash and cash equivalents at the end of Q1 2025 were $1,318,520, compared to $1,370,456 at the end of Q1 2024[20] - Capital expenditures for Q1 2025 totaled $13,152, up from $10,181 in Q1 2024[22] Operational Efficiency - Operating efficiency was maintained at the target of 30%, with pre-tax operating income growing by 24% from the previous year[8] - The workforce increased to 19,203 full-time equivalents, up from 18,403 in the previous year, reflecting a strategic boost in operations and sales[13] Market Trends - Airfreight volumes showed a year-over-year increase of 9%, with March alone seeing a 15% rise, while ocean freight volumes increased by 8% overall[13] - The company is experiencing early signs of a significant decline in China to U.S. ocean volumes, prompting customers to shift shipments to mitigate tariff exposure[7] Assets and Liabilities - The total assets as of March 31, 2025, were $4.76 billion, slightly up from $4.75 billion at the end of 2024[16] - Identifiable assets at the end of Q1 2025 were $4,756,650, compared to $4,488,268 at the end of Q1 2024[22] - The company reported a decrease in accounts receivable by $108,149 in Q1 2025, compared to an increase of $60,542 in Q1 2024[20] Interest Income - The company experienced a decrease in interest income to $9,184 in Q1 2025 from $14,878 in Q1 2024[18] Cybersecurity and Technology - The company is investing significantly in cybersecurity and technology to enhance operational systems and protect against disruptions[8]

Core Insights - Expeditors International (EXPD) reported a revenue of $2.67 billion for the quarter ended March 2025, reflecting a year-over-year increase of 20.8% and surpassing the Zacks Consensus Estimate by 9.95% [1] - The company's earnings per share (EPS) for the quarter was $1.47, up from $1.17 in the same quarter last year, exceeding the consensus EPS estimate by 13.08% [1] Revenue Breakdown - Airfreight services generated $901.76 million, exceeding the four-analyst average estimate of $823.90 million, with a year-over-year increase of 18.8% [4] - Customs brokerage and other services brought in $982.99 million, surpassing the four-analyst average estimate of $905.08 million, marking a year-over-year growth of 12.2% [4] - Ocean freight and ocean services achieved $781.67 million, exceeding the four-analyst average estimate of $677.63 million, with a significant year-over-year increase of 37% [4] Stock Performance - Over the past month, shares of Expeditors International have returned +5.8%, compared to the Zacks S&P 500 composite's +11.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - Expeditors International (EXPD) reported quarterly earnings of $1.47 per share, exceeding the Zacks Consensus Estimate of $1.30 per share, and up from $1.17 per share a year ago, representing an earnings surprise of 13.08% [1] - The company achieved revenues of $2.67 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 9.95%, compared to $2.21 billion in the same quarter last year [2] - Over the last four quarters, Expeditors International has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2 - The stock has added approximately 0.9% since the beginning of the year, while the S&P 500 has declined by 3.9% [3] - The current consensus EPS estimate for the upcoming quarter is $1.29 on revenues of $2.48 billion, and for the current fiscal year, it is $5.39 on revenues of $10.37 billion [7] - The Zacks Industry Rank indicates that the Transportation - Services sector is currently in the bottom 38% of over 250 Zacks industries, which may impact stock performance [8]

Core Insights - Expeditors International (EXPD) is expected to report quarterly earnings of $1.30 per share, reflecting an 11.1% increase year-over-year, with revenues projected at $2.43 billion, a 9.9% increase compared to the previous year [1] - Over the last 30 days, the consensus EPS estimate has been revised downward by 1.4%, indicating a reassessment by analysts [1][2] Revenue Estimates - Analysts estimate 'Revenues- Airfreight services' to be $823.90 million, representing an 8.5% year-over-year increase [4] - The consensus for 'Revenues- Ocean freight and ocean services' is $677.63 million, indicating an 18.7% increase from the year-ago quarter [4] - 'Revenues- Customs brokerage and other services' are projected to be $905.08 million, suggesting a 3.3% year-over-year change [5] - 'Net revenues- Airfreight services' are expected to reach $231.51 million, reflecting a 4.4% increase year-over-year [5] - 'Net revenues- Customs brokerage and other services' are estimated at $411.58 million, indicating a 4.3% change from the previous year [6] - 'Net revenues- Ocean freight and ocean services' are projected to be $182.69 million, suggesting a 16.5% year-over-year increase [6] Stock Performance - Over the past month, shares of Expeditors International have declined by 9.8%, while the Zacks S&P 500 composite has decreased by 0.7% [7] - Currently, EXPD holds a Zacks Rank 3 (Hold), indicating that its performance may align with the overall market in the near future [7]

Summary of Expeditors International of Washington (EXPD) Update / Briefing April 30, 2025 Company Overview - **Company**: Expeditors International of Washington (EXPD) - **Industry**: Global logistics and customs brokerage Key Points and Arguments Trade Actions and Tariffs - **Current Trade Actions**: Discussion on recent trade actions and their implications, particularly focusing on tariffs imposed by the Trump administration [6][9][11] - **Reciprocal Tariffs**: A universal 10% tariff is in place for most countries, with a 25% tariff for imports from China, Hong Kong, and Macau [15][18] - **Impact of Tariffs**: Duty payments have surged into billions annually for importers, particularly affecting goods from China [18][22] - **De Minimis Exception**: The de minimis exemption for goods valued under $800 from China and Hong Kong will be removed, requiring formal entry and duty payments starting May 2 [29][30] Sector-Specific Tariffs - **Automotive Sector**: A 25% tariff on passenger vehicles and light trucks began on April 3, with auto parts tariffs set to start on May 3 [36][38] - **Exemptions**: Exemptions exist for certain goods and USMCA qualifying auto parts, but the process for US content exemption is still pending [36][38] - **Import Adjustment Credits**: Automakers producing in the US can seek credits to offset tariffs on auto parts, which could be shared with suppliers [39][41] Future Trade Developments - **Ongoing Investigations**: Seven section 232 investigations are underway, including those on semiconductors and critical minerals, with public comment periods closing on May 16 [54] - **Negotiations with Countries**: The US is engaging in trade negotiations with over 75 countries, focusing on tariffs, quotas, and economic security [55][56] - **Potential Changes**: Anticipation of additional duty rates and changes in processes based on the America First trade policy reports [62][63] Recommendations for Businesses - **Stay Informed**: Companies are advised to monitor customs updates and seek expert assistance to navigate the complex regulatory environment [24][82] - **Engagement with CBP**: Businesses should submit questions to Customs and Border Protection (CBP) for clarification on gray areas in regulations [85] Other Important Content - **Complexity of Tariff Stacking**: The presentation included a visual representation of how various tariffs can stack, complicating the duty payment process for importers [64][70] - **Dynamic Environment**: The current trade landscape is characterized by uncertainty and rapid changes, necessitating flexibility and readiness to adapt [22][82] This summary encapsulates the critical insights from the Expeditors International of Washington briefing, highlighting the current state of trade actions, sector-specific tariffs, and strategic recommendations for businesses navigating these changes.

Industry Overview - The Zacks Transportation sector is diverse, including airlines, railroads, package delivery companies, and truckers, with expected first-quarter 2025 earnings growth of 7.9% year over year and revenue growth of 3.4% [1][2] Earnings Expectations - Major companies like Expeditors International of Washington, GXO Logistics, and JetBlue Airways are anticipated to report better-than-expected earnings despite challenges such as weak freight demand and inflation [2][5] - The decline in oil prices is expected to positively impact the bottom-line growth of transportation companies, as fuel expenses are a significant cost [3][4] Company-Specific Insights - **Expeditors International of Washington (EXPD)**: - Expected to report first-quarter 2025 results on May 6, with an Earnings ESP of +3.76% and a Zacks Rank of 3. Cost-cutting measures may help offset weak volumes [9] - Historically, EXPD has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 11.6% [10] - **GXO Logistics (GXO)**: - Set to report first-quarter 2025 results on May 7, with an Earnings ESP of +1.18% and a Zacks Rank of 3. Increased e-commerce and cost-cutting efforts are expected to support performance [10][11] - GXO has beaten the Zacks Consensus Estimate in two of the last four quarters, with an average beat of 1.04% [11] - **JetBlue Airways (JBLU)**: - Scheduled to report first-quarter 2025 results on April 29, with an Earnings ESP of +2.33% and a Zacks Rank of 3. Low fuel costs are likely to benefit JBLU's bottom line [12] - JBLU has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average beat of 62.22% [12]