Core Insights - Expeditors International of Washington (EXPD) reported second-quarter 2025 earnings of $1.34 per share, surpassing the Zacks Consensus Estimate of $1.24, marking an 8.1% year-over-year increase driven by higher freight volumes and customs fees [1][11] - Total revenues reached $2.65 billion, exceeding the Zacks Consensus Estimate of $2.4 billion, and reflecting an 8.7% year-over-year growth attributed to strong air tonnage and ocean volumes [1][11] Financial Performance - Airfreight tonnage and ocean container volume both increased by 7% during the quarter, contributing to an 11% year-over-year rise in operating income to $248 million [2] - Total operating expenses rose by 8.6% year over year to $2.4 billion [2] - Airfreight Services revenues grew by 10.6% year over year to $951.8 million, while ocean freight and services revenues increased by 3.7% to $675.8 million [3] Shareholder Returns - In the second quarter of 2025, EXPD returned $335 million to shareholders through dividends and share buybacks [4] - The company ended the quarter with cash and cash equivalents of $1.16 billion, slightly up from $1.15 billion at the end of 2024 [4] Strategic Outlook - The CEO of EXPD expressed optimism regarding the company's strategic initiatives aimed at maximizing operational excellence and enhancing customer service, positioning the company for organic growth and improved profitability [5]

Group 1 - Expeditors International reported $2.65 billion in revenue for the quarter ended June 2025, an increase of 8.7% year-over-year [1] - The company's EPS for the same period was $1.34, compared to $1.24 a year ago, reflecting an EPS surprise of +8.06% [1] - The reported revenue exceeded the Zacks Consensus Estimate of $2.4 billion by +10.52% [1] Group 2 - Airfreight services revenue was $951.79 million, surpassing the average estimate of $832.55 million by four analysts, representing a year-over-year change of +10.6% [4] - Customs brokerage and other services generated $1.02 billion in revenue, exceeding the average estimate of $915.75 million, with a year-over-year change of +10.5% [4] - Ocean freight and ocean services revenue reached $675.78 million, compared to the estimated $615.95 million, marking a +3.7% change year-over-year [4] Group 3 - Shares of Expeditors International returned +0.6% over the past month, while the Zacks S&P 500 composite changed by +1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Earnings Release Overview [Company Information & Contacts](index=1&type=section&id=Company%20Information%20%26%20Contacts) Expeditors International of Washington, Inc. released its Q2 2025 earnings, providing contact details for its executive leadership and investor relations - Expeditors International of Washington, Inc. (NYSE:EXPD) is headquartered in Bellevue, Washington[2](index=2&type=chunk) - Key contacts for the earnings release include Daniel R. Wall (President and CEO), Bradley S. Powell (Senior Vice President and CFO), and Geoffrey Buscher (Director - Investor Relations)[2](index=2&type=chunk) [Second Quarter 2025 Key Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Key%20Financial%20Highlights) Expeditors reported strong Q2 2025 financial performance, with growth across key metrics including EPS and revenues Second Quarter 2025 Key Financial Highlights (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | % Change | | :----------------------------------- | :------ | :------ | :------- | | Diluted Net Earnings Attributable to Shareholders per share (EPS) | $1.34 | $1.24 | 8% | | Net Earnings Attributable to Shareholders | $184 million | $175 million | 5% | | Operating Income | $248 million | $224 million | 11% | | Revenues | $2.7 billion | $2.4 billion | 9% | | Airfreight tonnage increase | 7% | - | - | | Ocean container volume increase | 7% | - | - | | Cash returned to shareholders (dividends & repurchases) | $335 million | - | - | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted strategic initiatives for operational excellence and adaptability in an unpredictable freight environment [CEO's Strategic Outlook](index=1&type=section&id=CEO's%20Strategic%20Outlook) CEO Daniel R. Wall highlighted strategic initiatives for operational excellence and adaptability, driving growth across all segments - Strategic initiatives are maximizing operational excellence and positioning the company to quickly adapt to a highly unpredictable environment[3](index=3&type=chunk) - All businesses grew, including airfreight (due to tonnage growth and higher rates, tight capacity, technology shipments) and ocean (increased volumes, South Asia exports, tariff deadlines)[4](index=4&type=chunk)[5](index=5&type=chunk) - Customs clearances increased in complexity, requiring greater skill, while road freight and warehousing also grew on strong volumes and new business[4](index=4&type=chunk)[5](index=5&type=chunk) - The freight environment is expected to remain unpredictable, with resilience stemming from the global network's experience and expertise[6](index=6&type=chunk) [CFO's Financial Review](index=2&type=section&id=CFO's%20Financial%20Review) CFO reported **11% operating income growth** from expense management, noting a higher tax rate and significant shareholder returns - Operating income increased by **11%** due to close expense monitoring and limiting headcount growth to support additional business activity[9](index=9&type=chunk) - Net earnings grew at a lower rate than operating income due to an increased effective tax rate from **25.8% to 28.7%**, driven by changes in foreign exchange rates and certain non-deductible expenses[9](index=9&type=chunk) - The Company returned **$335 million** to shareholders in common stock repurchases and dividends during the second quarter of 2025[9](index=9&type=chunk) Company Profile [Business Description](index=2&type=section&id=Business%20Description) Expeditors is a global logistics company providing comprehensive freight forwarding, customs brokerage, and customized solutions - Expeditors is a global logistics company headquartered in Bellevue, Washington, employing professionals in 172 district offices and numerous branch locations across six continents[10](index=10&type=chunk) - Services include consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution, and customized logistics solutions[10](index=10&type=chunk) Financial Performance [Summary Financial Results](index=3&type=section&id=Summary%20Financial%20Results) Q2 2025 revenues increased **9%** and operating income **11%** year-over-year, reflecting strong overall financial growth Three Months Ended June 30, 2025 vs 2024 (in thousands) | Metric | 2025 | 2024 | % Change | | :----------------------------------- | :--------- | :--------- | :------- | | Revenues | $2,651,885 | $2,439,001 | 9% | | Operating income | $247,736 | $223,919 | 11% | | Net earnings attributable to shareholders | $183,574 | $175,469 | 5% | | Diluted earnings attributable to shareholders per share | $1.34 | $1.24 | 8% | Six Months Ended June 30, 2025 vs 2024 (in thousands) | Metric | 2025 | 2024 | % Change | | :----------------------------------- | :--------- | :--------- | :------- | | Revenues | $5,318,304 | $4,645,679 | 14% | | Operating income | $513,594 | $438,695 | 17% | | Net earnings attributable to shareholders | $387,369 | $344,621 | 12% | | Diluted earnings attributable to shareholders per share | $2.82 | $2.41 | 17% | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached **$4.79 billion** as of June 30, 2025, with stable current assets, increased liabilities, and decreased equity Condensed Consolidated Balance Sheet (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Total current assets | $3,651,576 | $3,659,775 | | Total assets | $4,786,481 | $4,754,458 | | Total current liabilities | $2,116,274 | $2,066,473 | | Total liabilities and equity | $4,786,481 | $4,754,458 | | Total shareholders' equity | $2,195,354 | $2,223,012 | [Condensed Consolidated Statements of Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) All service segments reported increased revenues in Q2 2025 and year-to-date, driving overall operating income growth Revenues by Service (Three Months Ended June 30, in thousands) | Service | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Airfreight services | $951,787 | $860,323 | | Ocean freight and ocean services | $675,782 | $651,675 | | Customs brokerage and other services | $1,024,316 | $927,003 | | Total revenues | $2,651,885 | $2,439,001 | Operating Income (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Operating income | $247,736 | $223,919 | | Net earnings attributable to shareholders | $183,574 | $175,469 | Revenues by Service (Six Months Ended June 30, in thousands) | Service | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Airfreight services | $1,853,547 | $1,619,697 | | Ocean freight and ocean services | $1,457,447 | $1,222,461 | | Customs brokerage and other services | $2,007,310 | $1,803,521 | | Total revenues | $5,318,304 | $4,645,679 | Operating Income (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Operating income | $513,594 | $438,695 | | Net earnings attributable to shareholders | $387,369 | $344,621 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased in Q2 2025, reflecting higher capital expenditures and substantial shareholder returns Cash Flow Summary (Three Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :----------------------------------- | :--------- | :--------- | | Net cash from operating activities | $179,212 | $126,769 | | Net cash from investing activities | $(15,851) | $(7,877) | | Net cash from financing activities | $(339,875) | $(207,393) | | Cash and cash equivalents at end of period | $1,156,162 | $1,271,853 | Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :----------------------------------- | :--------- | :--------- | | Net cash from operating activities | $521,834 | $383,673 | | Net cash from investing activities | $(28,847) | $(17,961) | | Net cash from financing activities | $(505,846) | $(582,31

Core Viewpoint - Expeditors International (EXPD) reported quarterly earnings of $1.34 per share, exceeding the Zacks Consensus Estimate of $1.24 per share, and showing an earnings surprise of +8.06% [1][2] Financial Performance - The company achieved revenues of $2.65 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 10.52%, compared to $2.44 billion in the same quarter last year [2] - Over the last four quarters, Expeditors International has consistently exceeded consensus EPS estimates [2] Stock Performance - Since the beginning of the year, Expeditors International shares have increased by approximately 5.5%, while the S&P 500 has gained 7.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.33 on revenues of $2.73 billion, and for the current fiscal year, it is $5.38 on revenues of $10.54 billion [7] - The trend of estimate revisions for Expeditors International was mixed prior to the earnings release, which may change following the recent results [6] Industry Context - The Transportation - Services industry, to which Expeditors International belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, indicating potential challenges ahead [8]

Core Insights - Expeditors International of Washington (EXPD) is set to report its second-quarter 2025 results on August 5, 2025, with a history of earnings surprises, having outperformed the Zacks Consensus Estimate in three of the last four quarters, averaging a beat of 13.28% [1][2]. Earnings Performance - The Zacks Consensus Estimate for EXPD's Q2 2025 earnings has been revised upward by 1.64% to $1.24 per share, remaining flat compared to the previous year [4]. - The revenue estimate for Q2 2025 is $2.40 billion, reflecting a 1.62% decline year over year [6]. Revenue Breakdown - Estimated revenues for Airfreight Services and ocean freight are projected at $807.6 million, with overall revenue expected to decrease due to weak air and ocean freight volumes [6][7]. - Customs brokerage and other services are expected to generate $933.9 million, indicating a slight increase of 0.7% from the previous year [7]. Market Conditions - The company's performance is anticipated to be impacted by lower revenues due to weak demand and declining rates in air-freight tonnage and ocean containers [6][8]. - High capital expenditures and uncertain demand stemming from inflation and cautious consumer behavior are significant challenges for the company [8]. Earnings Prediction - The model predicts a likely earnings beat for EXPD, supported by a positive Earnings ESP of +0.11% and a Zacks Rank of 3 [9].

Industry Overview - The Zacks Transportation sector is diverse, including airlines, railroads, package delivery companies, and truckers. The S&P 500 members of this sector are expected to see a 4.7% decline in second-quarter 2025 earnings year over year, with revenues estimated to decrease by 0.5% [1]. Earnings Outlook - Several companies in the sector, such as Expeditors International of Washington (EXPD), GXO Logistics (GXO), and ZIM Integrated Shipping Services (ZIM), are anticipated to report better-than-expected earnings despite challenges like weak freight demand, tariff-induced uncertainty, inflation, and supply chain disruptions [2]. - The decline in oil prices, which fell by 6% in the April-June period, is expected to positively impact the bottom-line growth of transportation companies due to reduced fuel expenses [3]. Cost Management and E-commerce - Companies are likely benefiting from cost control measures aimed at improving profitability amid weak freight demand. The ongoing strength of e-commerce is also a positive factor for the sector [4]. Airline and Shipping Company Performance - U.S. airline companies are experiencing stabilization in air travel demand despite economic uncertainties, which is a favorable sign. Shipping companies are showing resilience, particularly those focusing on growth and operational efficiency, despite facing high inflation and tariff-related challenges [5]. Company-Specific Insights - **Expeditors International of Washington (EXPD)**: The company has an Earnings ESP of +0.11% and a Zacks Rank of 3. It is expected to report its second-quarter 2025 results on August 5. Despite weak volumes in air-freight and ocean containers, cost-cutting efforts are likely to support its bottom line. EXPD has beaten the Zacks Consensus Estimate in the last four quarters, averaging a 13.3% beat [9][10]. - **GXO Logistics (GXO)**: GXO has an Earnings ESP of +8.33% and a Zacks Rank of 3, with results scheduled for August 5. Increased e-commerce, automation, and outsourcing are expected to enhance its performance, alongside cost-cutting measures. The company has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 3.9% [11][12]. - **ZIM Integrated Shipping Services (ZIM)**: ZIM boasts an Earnings ESP of +20.66% and a Zacks Rank of 3, with results due on August 20. Its asset-light model allows for rapid capacity adjustments, and its focus on niche markets helps maintain strong pricing power. ZIM has consistently beaten the Zacks Consensus Estimate in the last four quarters, averaging a 34.5% beat [13][14].

Summary of Expeditors International of Washington (EXPD) Update / Briefing July 29, 2025 Company and Industry Overview - **Company**: Expeditors International of Washington (EXPD) - **Industry**: Air Cargo and Logistics Key Points and Arguments Air Market Dynamics - The air market update focuses on the Americas, discussing capacity, demand, and geopolitical influences affecting air cargo [6][7] - Global air capacity grew by 4% in the first half of 2025 compared to 2024, with a notable 44% increase on the Transpacific route [8][9] - Freighter capacity specifically saw a decline of 3% in both directions between Asia and the US, while freighter deployment to Europe increased by 8% [11][12] - The ecommerce sector is experiencing a shift, with a significant reduction in ecommerce volumes flying into the US due to the end of de minimis exemptions [29][30] Geopolitical and Trade Influences - Geopolitical tensions and trade barriers are reshaping air cargo routes, with a notable shift from US-bound cargo to Europe and Southeast Asia [36][38] - The ongoing trade negotiations and tariff changes are creating uncertainty, impacting supply chains and air freight demand [47][61] - The Chinese economy is facing multiple headwinds, affecting its trade relationships and demand for air cargo services [51][52] Capacity and Demand Trends - The demand for air freight has been healthy, with a 6.6% growth in global air demand in Q1 2025, but is expected to level off to around 3-4% for the rest of the year [21][24] - The inventory-to-sales ratio is a critical indicator, with lower inventory levels indicating higher demand for air freight [23] - Vietnam has emerged as a significant exporter to the US, with a 55% growth in the first five months of 2025 compared to 2024, driven by the tech sector [44][45] Future Outlook - The expectation for new aircraft deliveries has been pushed back to 2027-2028, leading to an aging fleet and increased maintenance needs [19][20] - The air cargo market is expected to continue adjusting to shifting trade patterns, with potential increases in rates for US outbound cargo if demand rises without corresponding capacity [84][85] - The geopolitical landscape is likely to remain volatile, impacting global supply chains and air freight dynamics [75][76] Other Important Insights - The webinar highlighted the importance of adapting to changing trade policies and the need for companies to reassess their supply chain strategies in light of geopolitical tensions [58][60] - The discussion emphasized the role of ecommerce in driving air cargo demand and the challenges faced by companies in navigating regulatory changes [29][30][31] - The potential for increased investment in infrastructure, particularly in Vietnam, to support growing demand was noted as a positive development [45][46]

Industry Overview - The Zacks Transportation-Services industry is currently facing challenges such as dull freight rates, high inflation, and ongoing supply-chain disruptions, along with tariff-related uncertainties and geopolitical issues [1][4][7] - Companies in this industry provide logistics, leasing, and maintenance services, focusing on global logistics management and third-party logistics solutions [3] Current Trends - Supply-chain disruptions and weak freight rates continue to negatively impact the industry, with the Cass Freight Shipments Index declining by 2.4% year over year in June, marking a deterioration for 11 consecutive months [4] - The industry is experiencing significant inflation, particularly in labor and freight costs, prompting companies to implement cost-cutting measures to improve productivity and efficiency [5] - Despite economic recovery, the industry's earnings outlook is negative, with a 31.2% decrease in earnings estimates for 2025 since August 2024 [10] Financial Performance - The Zacks Transportation-Services industry has underperformed the S&P 500, declining by 12.8% over the past year, while the S&P 500 appreciated by 12.2% [12] - The industry is currently trading at a forward price-to-sales ratio of 1.32X, significantly lower than the S&P 500's 5.26X and the sector's 1.45X [15] Company Highlights - Expeditors International of Washington (EXPD) has a Zacks Rank 2 (Buy) and has consistently beaten earnings estimates by an average of 13.3% over the last four quarters, despite facing weak volumes [17] - C.H. Robinson Worldwide (CHRW) holds a Zacks Rank 3 (Hold) and has surpassed earnings estimates by an average of 14.5% in the past four quarters, with a strong liquidity position [21] - Matson (MATX), also with a Zacks Rank 3, has implemented effective cost-management actions and has beaten earnings estimates in three of the last four quarters, with an average beat of 9.7% [24]

Core Insights - Expeditors International (EXPD) has a strong track record of exceeding earnings estimates, particularly in the last two quarters, with an average surprise of 15.28% [1][5] - The company reported earnings of $1.30 per share for the most recent quarter, falling short of the expected $1.47, but still achieved a surprise of 13.08% [2] - In the previous quarter, Expeditors reported $1.68 per share against an expectation of $1.43, resulting in a surprise of 17.48% [2] Earnings Estimates and Predictions - Estimates for Expeditors International have been trending upwards, influenced by its history of earnings surprises [5] - The company currently has a positive Earnings ESP of +0.11%, indicating a bullish outlook from analysts regarding its earnings prospects [8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat in the upcoming report [8] Earnings ESP and Market Performance - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7] - The next earnings report for Expeditors International is anticipated to be released on August 5, 2025 [8]

Core Viewpoint - The analysis presents a bullish outlook on Expeditors (NYSE: EXPD), highlighting its exceptional returns on equity and the stock's persistent undervaluation compared to the market [1]. Financial Performance - Expeditors has demonstrated phenomenal returns on equity, which is a key factor in the positive investment outlook [1]. Market Comparison - The stock is noted to be undervalued relative to the S&P 500, which is trading at a higher PE multiple, suggesting potential for price appreciation [1].