uploads/2018/08/Image-4.png

EXPD’s Second-Quarter Earnings Beat Estimates, Stock Zigzags

By

Updated

EXPD’s second-quarter earnings

Expeditors International of Washington (EXPD), a major third-party transporter, announced its second-quarter earnings on August 7 before the markets opened. Its adjusted EPS came in at $0.79, beating Thomson Reuters–surveyed analysts’ estimate of $0.78 by $0.01. The company surpassed analysts’ adjusted EPS estimate by a very thin margin. Its adjusted EPS rose 31.7% YoY (year-over-year) from $0.60 in Q2 2017.

Article continues below advertisement

Yesterday, EXPD stock opened at $70.62, down 8.9% from its closing price of $77.49 on August 6. The stock rose to $76, and its intraday low was $69.71. After the zigzag, EXPD stock recovered to close at $72.93, down 5.9% from the closing price on August 6. It seems the markets were expecting more from the company since beating analysts’ estimates wasn’t distinct for both earnings and revenue. Today, August 8, the stock opened at $72.67, slightly lower than yesterday’s close. However, it picked up momentum, touching $73.51 in the early morning session.

Q2 revenue and other key metrics

EXPD’s second-quarter revenue rose 17% YoY to $1.95 billion, from $1.67 billion in Q2 2017. The company managed to beat analysts’ revenue estimate by a narrow margin of 1.33%. The trucker’s air freight tonnage volume expanded 4% YoY, and its ocean container volume rose 1% YoY. Its net revenue grew 14% YoY to $642.5 million in the quarter, from $563.3 million in Q2 2017. Its operating income rose 9% YoY to $184 million, from $168.8 million in Q2 2017.

Article continues below advertisement

Jeffrey Musser, EXPD’s president and CEO, said, “We experienced strong performance in our ocean forwarding and order management businesses, but ocean freight net revenues were down 5% on a 1% increase in volumes, as carriers took steps to mitigate the impact of volatile pricing, excess capacity, and higher fuel costs.”

Peers’ second-quarter earnings

Momentum in the US economy is leading to higher freight volumes. That and lower taxes have significantly boosted transportation companies’ second-quarter earnings. Among the major trucking (XTN) companies, C.H. Robinson Worldwide (CHRW) reported a 45% rise in its second-quarter diluted EPS to $1.13, from $0.78 in Q2 2017.

XPO Logistics’ (XPO) adjusted diluted EPS was $0.98 in the second quarter of 2018, up 63.3% from $0.60 in Q2 2017. J.B. Hunt Transport Services (JBHT) reported adjusted EPS of $1.37 in the second quarter, up ~56% from $0.88 in Q2 2017.

Advertisement

More From Market Realist