Expeditors Beats on Earnings, Misses on Revenues in Q2 - Analyst Blog

Zacks Equity Research
Updated

Expeditors International of Washington Inc.’s EXPD second-quarter 2015 earnings of 61 cents per share beat the Zacks Consensus Estimate by 8 cents. Earnings improved 33% on a year-over-year basis.

Expeditors International of Washington Inc. - Earnings Surprise | FindTheBest

Total revenue of $1.69 billion fell short of the Zacks Consensus Estimate of $1.74 billion. Revenues climbed 6% from the year-ago figure. Strong air freight and ocean freight revenues facilitated the year-over-year top-line improvement in the second quarter.

Gross profit (net revenue) increased 14% year over year in the second quarter to $552.1 million. Gross margin (yield) improved to 32.6% in the reported quarter. Expeditors exited the second quarter with cash and cash equivalents of $985.7 million as compared with $927.1 million at the end of 2014.

Segmental Revenues

Airfreight Services revenues improved 4% year over year to $693.8 million in the second quarter. Ocean Freight and Ocean Services revenues increased 7.5% year over year to $576.8 million. Customs Brokerage and Other Services revenues rose 6.5% to approximately $421 million.

Our Take

We are pleased by Expeditors’ earnings outperformance in second-quarter 2015, which marks the fourth successive earnings beat at the company. We believe continued strength in the airfreight business, led by growing trade between the U.S. and China, places the company favorably in the freight forwarding and customer brokerage business. Furthermore, the company’s growing supply chain and cost-control measures should support revenue and margin expansion, going forward.

Zacks Rank

Currently, Expeditors has a Zacks Rank #3 (Hold). Better-ranked stocks in the transportation sector include China Eastern Airlines CEA, Ryanair Holdings RYAAY and Allegiant Travel Company ALGT. All the three stocks carry a Zacks Rank #1 (Strong Buy).

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