Expeditors (EXPD) Beats on Earnings and Revenues in Q3
Expeditors International of Washington Inc. (EXPD) reported third-quarter 2014 adjusted earnings of 53 cents per share, beating the Zacks Consensus Estimate of 49 cents. Earnings improved 18% from the year-ago figure of 45 cents per share. Earnings benefitted from higher revenues. The stock gained in early trading due to the strong results.
Expeditors International Of Washington, Inc - Earnings Surprise | FindTheBest
Total revenue rose 11% year over year to $1.71 billion, handsomely beating the Zacks Consensus Estimate of $1.65 billion. Double-digit growth in air and ocean freight volumes along with along with the impressive performance of the customs brokerage and other services business boosted the company's results in the quarter.
Gross profit (net revenue) increased 6% year over year in the quarter to $513.3 million. Gross margin (yield) was 30.1%, down from 31.5% in the year-ago quarter. In the third quarter, operating expense rose 11% to $1.55 billion and operating income climbed 8.7% to $159.1 million.
Revenue Segments
Airfreight Services revenues improved 9% year over year to $686.4 million in the third quarter.
Ocean Freight and Ocean Services revenues increased 14.3% year over year to $600.5 million.
Customs Brokerage and Other Services revenues rose 8.7% year over year to $418.2 million.
Liquidity
Expeditors’ exited the third quarter with cash and cash equivalents of $990.5 million as compared to $970.6 million at the end of the preceding quarter. Operating cash flows were $86.7 million versus $96.3 million in the prior-year quarter.
We believe continued strength in the airfreight business owing to growing trade between the U.S. and China places the company favorably in the freight forwarding and customer brokerage business. Further, Expeditors’ growing supply chains and cost-control measures should support revenue and margin expansion going forward. Nevertheless, we remain cautious about competitive threats from other logistic companies like CH Robinson Worldwide Inc. (CHRW) and FedEx Corp. (FDX).
Zacks Rank
Currently, Expeditors carries a Zacks Rank #4 (Sell). A better-ranked stock is Radiant Logistics, Inc. (RLGT), which sports a Zacks Rank #2 (Buy).
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