Expeditors International of Washington (EXPD) is thriving with an increase in volumes, which is boosting its top line. Shareholder-friendly initiatives are encouraging. However, EXPD is grappling with geopolitical uncertainties and elevated operating expenses.Factors Favoring EXPDThe robust growth in air tonnage and ocean volumes had a positive impact on all areas of EXPD during the third quarter of 2024. Airfreight tonnage rose 19%, while ocean container volumes grew 12%. Rates also saw widespread increase ...

Expeditors International of Washington (EXPD) is benefiting from its cost-reduction initiatives. The company’s shareholder-friendly initiatives also bode well.Let us delve deep to unearth the factors working in favor of this Zacks Rank #2 (Buy) stock.EXPD’s Northward Earnings Estimates: In the past 60 days, the Zacks Consensus Estimate for current-quarter, current-year and next-year earnings has been revised upward by 6.9%, 8.4% and 0.2%, respectively. Such favorable estimate revisions indicate brokers’ con ...

Financial Performance - Operating income increased by 40% from the third quarter of 2023 and 35% from the second quarter of 2024[44] - Net earnings to shareholders increased by 34% from the third quarter of 2023 and 31% from the second quarter of 2024[45] - Operating income increased by 40% to $301,524 thousand for the three months ended September 30, 2024, compared to the same period in 2023[51] - Net earnings attributable to shareholders rose by 34% to $229,574 thousand for the three months ended September 30, 2024[51] Revenue Growth - Ocean containers shipped increased by 12% and airfreight tonnage increased by 19% compared to the third quarter of 2023[44] - Airfreight services revenues increased by 36% to $986,950 thousand for the three months ended September 30, 2024, compared to the same period in 2023, driven by a 19% increase in tonnage and higher average sell and buy rates[51][53] - Ocean freight and ocean services revenues surged by 82% to $1,017,618 thousand for the three months ended September 30, 2024, primarily due to a 101% increase in average sell rates and a 12% rise in containers shipped[51][54] - Customs brokerage and other services revenues grew by 10% to $995,563 thousand for the three months ended September 30, 2024, mainly due to higher shipment volumes in North America[51][56] - Ocean freight consolidation revenues increased by 125% for the three months ended September 30, 2024, due to a 101% rise in average sell rates and a 12% increase in containers shipped[54] - North Asia and South Asia ocean freight and ocean services revenues increased by 135% and 164%, respectively, for the three months ended September 30, 2024[54] Cash Flow and Capital Management - Cash from operations was $90 million, down from $190 million in the third quarter of 2023, due to significant investment in working capital[45] - The company returned $140 million to shareholders through common stock repurchases[45] - Net cash provided by operating activities for the three and nine months ended September 30, 2024 was $90 million and $474 million, respectively, compared to $190 million and $895 million in the same periods in 2023[64] - Working capital at September 30, 2024 was $1,707 million, including cash and cash equivalents of $1,293 million[64] - Cash used in investing activities for the three and nine months ended September 30, 2024 was $13 million and $30 million, respectively, primarily for capital expenditures[64] - Cash used in financing activities during the three and nine months ended September 30, 2024 was $659 million and $1,247 million, respectively, primarily for repurchasing common stock[64] - Cash and cash equivalents at September 30, 2024 were $1,293 million, with $614 million invested at short-term market interest rates[68] Market and Demand Trends - Strong demand for ocean transportation led to higher volumes and sharp increases in average buy and sell rates[44] - Demand for airfreight out of Asia remained high due to capacity constraints and e-commerce business demand[44] - Historical seasonal demand trends show the first quarter as the weakest and the third and fourth quarters as the strongest[47] - The company's revenues are significantly impacted by consumer demand, trade tariffs, and supply chain disruptions[47] - Airfreight services tonnage increased by 19% for the three months ended September 30, 2024, driven by higher demand in healthcare and technology sectors[53] Operational Costs and Expenses - Salaries and related costs increased by 9% to $450,308 thousand for the three months ended September 30, 2024, due to higher commissions and bonuses[57] - The consolidated effective income tax rate was 26.4% for both the three and nine months ended September 30, 2024[59] Foreign Currency Impact - Net foreign currency losses for the three months ended September 30, 2024 were approximately $11 million, compared to less than $1 million in the same period in 2023[60] - Net foreign currency gains for the nine months ended September 30, 2024 were less than $1 million, compared to net losses of approximately $6 million in the same period in 2023[60] - A hypothetical 10% weakening of the U.S. dollar would have increased operating income by approximately $45 million for the nine months ended September 30, 2024[66] Liabilities and Obligations - Borrowings under international unsecured bank lines of credit at September 30, 2024 were $48 million, with $87 million in contingent liabilities from standby letters of credit and guarantees[65] - Fixed lease payment obligations at September 30, 2024 totaled $699 million, with $141 million payable within 12 months[65] Global Operations and Risks - The company operates in over 60 countries and is influenced by global economic and political conditions, including tariffs and trade restrictions[46]

Core Insights - Expeditors International (EXPD) reported $3 billion in revenue for Q3 2024, a 37% year-over-year increase, with an EPS of $1.63 compared to $1.16 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $2.37 billion by 26.72%, and the EPS surpassed the consensus estimate of $1.33 by 22.56% [1] Revenue Performance - Airfreight services revenue reached $986.95 million, exceeding the average estimate of $805.65 million by four analysts, representing a 36.3% year-over-year increase [3] - Ocean freight and ocean services generated $1.02 billion, significantly higher than the estimated $626.68 million, marking an 81.6% year-over-year change [3] - Net revenues from ocean freight and ocean services were $233.79 million, compared to the average estimate of $181.54 million, reflecting a 35.4% year-over-year increase [3] - Net revenues from airfreight services amounted to $246.59 million, surpassing the estimated $214.57 million, with an 18.7% year-over-year increase [3] - Customs brokerage and other services net revenues were $425.78 million, slightly above the average estimate of $415.49 million, indicating a 4.5% year-over-year change [3] - Total revenues from customs brokerage and other services reached $995.56 million, compared to the estimated $935.18 million, representing a 10% year-over-year increase [3] Stock Performance - Expeditors International's shares have returned +0.4% over the past month, while the Zacks S&P 500 composite has decreased by -0.5% [4] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [4]

Expeditors International (EXPD) came out with quarterly earnings of $1.63 per share, beating the Zacks Consensus Estimate of $1.33 per share. This compares to earnings of $1.16 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 22.56%. A quarter ago, it was expected that this logistics services provider would post earnings of $1.24 per share when it actually produced earnings of $1.24, delivering no surprise.Over the last four qu ...

Core Viewpoint - Expeditors International (EXPD) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The earnings report is scheduled for November 5, 2024, with expectations of quarterly earnings at $1.33 per share, reflecting a year-over-year increase of +14.7% [3]. - Revenues are projected to reach $2.37 billion, marking an 8.1% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.19% higher in the last 30 days, indicating a positive reassessment by analysts [4]. - The Most Accurate Estimate for Expeditors International is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +2.13% [10]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [8]. - Expeditors International currently holds a Zacks Rank of 2, indicating a high likelihood of beating the consensus EPS estimate [10]. Historical Performance - In the last reported quarter, Expeditors International met the expected earnings of $1.24 per share, resulting in no surprise [11]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [12]. Industry Context - In the Zacks Transportation - Services industry, Hertz Global Holdings, Inc. is expected to report a loss of $0.50 per share for the same quarter, indicating a year-over-year change of -171.4% [16]. - Hertz Global's consensus EPS estimate has been revised down by 6.1% in the last 30 days, and it currently has an Earnings ESP of -5.77% combined with a Zacks Rank of 4 (Sell), making it difficult to predict an earnings beat [17].

Expeditors International of Washington (EXPD) is scheduled to report its third-quarter 2024 results on Nov. 5 before market open. Find the latest EPS estimates and surprises on Zacks Earnings Calendar. The company has a disappointing earnings history, having missed the Zacks Consensus Estimate in two of the preceding four quarters and surpassed twice. The average miss is 2.7%. The Zacks Consensus Estimate for EXPD's soon-to-be-reported quarter's earnings is pegged at $1.33 per share, revised upward by 3.10% ...

Core Viewpoint - Expeditors International (EXPD) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates in determining near-term stock price movements, making it a valuable tool for investors [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling pressure that affects stock prices [4]. Company Performance Indicators - The recent upgrade for Expeditors International indicates a positive outlook for its earnings, suggesting potential buying pressure and an increase in stock price [3][5]. - For the fiscal year ending December 2024, Expeditors International is expected to earn $5.01 per share, with a 0.9% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimate revisions, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - The upgrade of Expeditors International to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating its strong earnings estimate revision feature and potential for market-beating returns [10].

Core Viewpoint - Expeditors (EXPD) is experiencing financial stability due to its robust liquidity position, but it faces challenges from rising operating expenses that are negatively impacting its bottom line [1][4]. Group 1: Financial Performance - The company returned $205 million to shareholders through stock repurchases and dividends in Q2 2024, which enhances investor confidence and positively affects the bottom line [2]. - EXPD exited Q2 2024 with a current ratio of 1.71, indicating sufficient cash to meet short-term debt obligations, and its shares have risen 10.6% over the past year, contrasting with a 1% decline in its industry [3]. Group 2: Operating Expenses - Operating expenses surged by 11.2% year over year to $2.22 billion in Q2 2024, with aircraft services, which account for 29% of total operating costs, increasing by 23% year over year [4]. - Ocean freight and ocean services expenses rose by 17.8% year over year, contributing to the overall increase in operating costs [4]. Group 3: Market Conditions - The company is facing declining airfreight and ocean container volumes due to weakened demand and falling rates, as management notes that shippers are experiencing uncertain demand amid high inflation and interest rates [5].

It has been about a month since the last earnings report for Expeditors International (EXPD) . Shares have added about 7.1% 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 its most recent earnings report in order to get a better handle on the important drivers. Expeditors' Q2 Earni ...