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 Insights - Air Transport Services (ATSG) has shown strong performance in the Transportation sector, gaining approximately 2.1% year-to-date, while the sector has declined by an average of -15.6% [4] - ATSG currently holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook and strong analyst sentiment [3][4] - The Zacks Consensus Estimate for ATSG's full-year earnings has increased by 0.4% over the past three months, reflecting improving earnings expectations [4] Company Performance - Air Transport Services is part of the Transportation - Air Freight and Cargo industry, which has seen a decline of about 12.4% year-to-date, indicating that ATSG is outperforming its industry peers [6] - The company is ranked 183 in the Zacks Industry Rank, suggesting a relatively better position compared to its industry [6] Sector Comparison - The Transportation sector includes 126 individual stocks and currently holds a Zacks Sector Rank of 15, indicating a weaker overall performance compared to other sectors [2] - Another notable performer in the Transportation sector is Expeditors International (EXPD), which has returned 10% year-to-date and also holds a Zacks Rank of 2 (Buy) [5][7]

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]