Expeditors (EXPD) Q1 Earnings Lag Estimates, Revenues Beat

Expeditors International of Washington (NASDAQ:EXPD) posted mixed results in the in the first quarter of 2019. The company reported better-than-expected revenues but lower-than-expected earnings per share.

The company’s earnings of 80 cents per share fell short of the Zacks Consensus Estimate by 5 cents. However, the bottom line increased on a year-over-year basis. The year over year improvement was owing to higher revenues and a lower effective tax rate. Effective tax rate declined to 28.3% in the reported quarter from 31.1% a year-ago.

Revenues came in at $2.02 billion outpacing the Zacks Consensus Estimate of $1.96 billion. The top line improved 9% from the year-ago figure. Volumes with respect to airfreight tonnage decreased 4% while ocean container volumes increased 6% on a year-over-year basis.

Gross profit (net revenues) increased 3% year over year in the first quarter of 2019 to $654 million. Gross margin (yield) came in at 32.4% compared with 34.3% in the year-ago quarter.

In the first quarter, the company repurchased 0.6 million shares at an average price of $75.4 per share. The company exited the quarter with cash and cash equivalents of $1.19 billion compared with $923.74 million at the end of 2018.

Segmental Revenues

Airfreight Services revenues declined 2.2% year over year to $714.9 million in the first quarter. Ocean Freight and Ocean Services revenues increased 9.2% to $568.64 million. Customs Brokerage and Other Services revenues increased 22.3 % year over year to approximately $736.5 million.

Zacks Rank & Key Picks

Expeditors carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader Transportation sector include CSX Corporation (NASDAQ:CSX) , GATX Corporation (NYSE:GATX) and SkyWest (NASDAQ:SKYW) . While SkyWest sports a Zacks Rank #1 (Strong Buy), CSX and GATX carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Each of the companies flaunts a stellar earnings history. While SkyWest and GATX have surpassed estimates in all the trailing four quarters, CSX beat estimates in three of the last four quarters.

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