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]

Core Viewpoint - Expeditors International (EXPD) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, supported by a strong history of exceeding expectations [1][6]. Earnings Performance - The company has a solid track record of surpassing earnings estimates, with an average surprise of 20.02% over the last two quarters [2]. - In the most recent quarter, Expeditors reported earnings of $1.68 per share, exceeding the expected $1.43 per share by 17.48%. In the previous quarter, it reported $1.63 per share against an estimate of $1.33 per share, resulting in a surprise of 22.56% [3]. Earnings Estimates and Predictions - Recent estimates for Expeditors International have been revised upward, indicating positive sentiment among analysts. The Zacks Earnings ESP for the company is currently positive, suggesting a strong likelihood of an earnings beat [6][9]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have historically produced positive surprises nearly 70% of the time, indicating a high probability of exceeding consensus estimates [7]. Earnings ESP and Zacks Rank - Expeditors International has an Earnings ESP of +1.66%, reflecting recent bullish revisions by analysts regarding the company's earnings prospects. This, combined with a Zacks Rank of 2 (Buy), suggests a strong potential for another earnings beat [9]. - The Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being more reflective of the latest analyst insights [8].

Core Viewpoint - Expeditors International (EXPD) has shown a slight increase in share price, outperforming the S&P 500, and there is speculation about whether this positive trend will continue leading up to the next earnings release [1] Group 1: Earnings Report and Market Reaction - The last earnings report for Expeditors International was about a month ago, during which shares increased by approximately 0.1% [1] - Estimates for the company have trended upward over the past month, with a consensus estimate shift of 6.22% [2] Group 2: VGM Scores and Investment Strategy - Expeditors International has an average Growth Score of C, a Momentum Score of A, and a Value Score of D, placing it in the bottom 40% for the value investment strategy [3] - The overall aggregate VGM Score for the stock is D, which is significant for investors not focused on a single strategy [3] Group 3: Future Outlook - The upward trend in estimates and the magnitude of revisions are viewed positively, leading to a Zacks Rank of 2 (Buy) for Expeditors International [4] - An above-average return is expected from the stock in the coming months [4]

Core Insights - Expeditors International (EXPD) is outperforming the Transportation sector, with a year-to-date return of approximately 5.5% compared to the sector's average return of -1.9% [4] - The Zacks Rank for Expeditors International is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - The Transportation group ranks 14 out of 16 in the Zacks Sector Rank, with Expeditors International being one of 130 companies in this group [2] Company Performance - Over the past three months, the Zacks Consensus Estimate for EXPD's full-year earnings has increased by 2.5%, reflecting improved analyst sentiment [4] - Expeditors International belongs to the Transportation - Services industry, which has an average year-to-date loss of 5.3%, indicating that EXPD is performing better than its industry peers [6] Industry Context - The Transportation - Services industry is currently ranked 199 in the Zacks Industry Rank, while the Transportation - Shipping industry, which includes Frontline (FRO), is ranked 206 with a year-to-date loss of 6.6% [6] - Frontline has also shown strong performance with a year-to-date return of 12.1% and a Zacks Rank of 2 (Buy) [5]

Core Viewpoint - DHL Group Sponsored ADR (DHLGY) is currently viewed as a better value opportunity compared to Expeditors International (EXPD) based on various financial metrics and analyst outlooks [1] Valuation Metrics - DHLGY has a forward P/E ratio of 13.37, significantly lower than EXPD's forward P/E of 22.15, indicating that DHLGY may be undervalued [5] - The PEG ratio for DHLGY is 2.64, while EXPD's PEG ratio is 5.09, suggesting that DHLGY offers better value when considering expected earnings growth [5] - DHLGY's P/B ratio stands at 2.27, compared to EXPD's P/B of 7.59, further supporting the notion that DHLGY is more attractively priced relative to its book value [6] Analyst Outlook - DHLGY has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision trend compared to EXPD, which has a Zacks Rank of 3 (Hold) [3] - The improving earnings outlook for DHLGY enhances its attractiveness as a value investment [7]

Revenue Composition - Airfreight services accounted for approximately 34% of Expeditors' total revenues in 2024, compared to 35% in 2023[38] - Ocean freight services accounted for approximately 30% of total revenues in 2024, up from 25% in 2023[47] - Customs brokerage and other services represented about 36% of total revenues in 2024, down from 40% in 2023[55] Company Operations - The company operates 172 district offices globally, with 70 in the Americas, 45 in Europe, and 17 in North Asia[25][26] - Expeditors has approximately 18,000 employees and focuses on organic growth rather than acquisitions, although it may acquire technology or specialized expertise when necessary[23] - Expeditors employed more than 18,000 people as of December 31, 2024, with approximately 12,000 in international locations[65] Strategic Focus - Expeditors' strategic plan includes focusing on the right markets and customers to achieve sustainable and profitable growth[30] - The company emphasizes organic growth supplemented by select strategic acquisitions, contrasting with competitors who rely on aggressive mergers and acquisitions[74] - Expeditors is committed to maintaining a strong corporate culture and investing in employee training to adapt to market changes[29] Technology and Innovation - The company emphasizes a single enterprise technology platform to enhance logistics operations and provide comprehensive visibility and advanced analytics[31][34] - Expeditors' management is focused on developing innovative solutions to meet sophisticated supply chain requirements, investing in technology and digital solutions[73] - Expeditors supports customers' supply chain strategies through digital products, including quoting, booking, and data analytics, enhancing customer retention[70] Customer Service and Solutions - The company provides tailored logistics solutions by understanding customer-specific processes and objectives[35] - Expeditors emphasizes quality customer service and compliance, believing its prices are competitive in the market[69] - The logistics services offered include airfreight, ocean freight, customs brokerage, and warehousing, with a focus on optimizing supply chains for diverse industries[10][38] Market Environment - The company operates in a highly competitive global logistics services industry, with significant competition from both large firms and niche players[68] - Supply chain disruptions have led many companies to focus on building resiliency and agility in their supply chains, indicating a competitive market landscape[72] - The logistics services industry remains intensely competitive, with many companies vying for market share, including new technology-based entrants[68] Financial Management - Expeditors' pricing model is flexible, with fixed pricing arrangements for a portion of forecasted commitments and spot market pricing negotiated at regional levels[53] - The company anticipates continued trends in supply-chain efficiency and cost reduction among its customers, impacting pricing and capacity management[46] - The company faces risks from currency volatility and inflation, which have led to rising labor costs and service provider rate increases since 2021[76][77] Environmental Commitment - The company is committed to reducing its environmental impact and has been disclosing its Scope 1 and Scope 2 greenhouse gas emissions data since 2010[87] - Expeditors actively monitors climate-related risks and participates in initiatives like SmartWay to track and reduce freight emissions[88] Leadership and Governance - Expeditors' executive leadership includes Jeffrey S. Musser as CEO, with planned transitions in leadership roles set for 2025[97][98] - Daniel R. Wall appointed as President, Global Geographies and Operations effective January 1, 2024, and will become President and CEO on April 1, 2025[98] - Blake R. Bell promoted to President, Global Products and will take on the role of President, Global Business Development effective January 1, 2025[99] Risk Management - Expeditors has a total risk retained of $5 million in 2024 for cargo legal liability insurance covering claims for losses attributable to missing or damaged shipments[95] - Future fuel price volatility may impact revenues and operating income if increases cannot be passed through to customers[78] - The company maintains satisfactory relationships with service providers, which is crucial for operations, especially amid regulatory changes and security concerns[75]

Leadership Transition - Expeditors International of Washington, Inc. has appointed Daniel R. Wall as the next president and CEO, effective April 1, 2025, succeeding Jeffrey S. Musser who will step down on March 31, 2025 [1][2] - Bob Carlile, chairman of the board, praised both Musser and Wall for their long and distinguished careers within the company, highlighting their leadership qualities [3] Jeffrey S. Musser's Tenure - Musser joined Expeditors at the age of 16 and has had a 42-year career, becoming CEO in 2014 and overseeing significant growth from $6.1 billion in revenues and 14,000 employees in 2013 to $10.6 billion in revenues and over 18,000 employees in 2024 [4][5] - Under Musser's leadership, the company returned $9.6 billion to shareholders through dividends and share repurchases, and increased earnings per share by 240% [4] Daniel R. Wall's Background - Wall has been with Expeditors since March 1987, holding various leadership positions, including president of Global Products and Global Services, and most recently president of Global Geographies and Operations [6][7] - His extensive experience and proven leadership skills are expected to enhance the company's operations and competitive position in the industry [7]