Expeditors’ Q2 revenue up 9%

Expeditors today reported $2.4 billion in revenue for the second quarter of 2024, an increase of 9% year over year. [caption id="attachment_98641" align="alignright" width="300"] (Courtesy/Expeditors)[/caption] THE BIG PICTURE: Like other freight forwarders , Expeditors saw improved YoY revenue in Q2 following more than a year of poor market conditions. Expeditors’ Q1 revenue was down 15% YoY and its full-year 2023 revenue was down 46% YoY. BY THE NUMBERS: Expeditors’ operating income in Q2 was $224 million, down 10% YoY, according to today’s earnings report. The freight forwarder also reported in Q2: Net earnings attributable to shareholders of $175.5 million, down 11% YoY; Diluted earnings attributable to shareholders per share of $1.24, down 5% YoY; Airfreight services revenue of $860.3 million, up 14.5% YoY; Ocean freight and services revenue of $651.7 million, up 9.7% YoY; and Customs brokerage and other services revenue of $927 million, up 3.6% YoY. Air cargo tonnage rose YoY by: 13% in April; 15% in May; 19% in June; and 15% in Q2. WHAT THEY’RE SAYING: Expeditors’ Q2 operations were affected by the e-commerce boom out of Asia and ongoing instability in the Middle East . “We continued to adapt well to another erratic quarter for our industry, which has been impacted by the rapid changes and imbalances in buy versus sell rates, particularly on exports out of Asia,” Expeditors President and Chief Executive Jeffrey S. Musser said in the earnings report. “Air market capacity has been constrained by e-commerce demand and ocean routing has been significantly disrupted by geopolitical events in the Red Sea.” Air tonnage improved 15% YoY and 10% from Q1, Musser said. “But buy rates outpaced increased sell rates, as international direct e-commerce demand from North Asia outweighed increased carrier capacity to accommodate this growth in demand,” he said. “The air markets have further been impacted by manufacturing relocations.” FLASHBACK: Expeditors fell out of the top five on Air Cargo Next ’s Power 25 list of top freight forwarders, losing the No. 5 spot to Chinese third-party logistics company Sinotrans . Expeditors ranks seventh on the list, moving 782,000 tonnes of air cargo in 2023. NOTEWORTHY: As of June 30, Expeditors had 18,463 full-time employees, down 3.1% YoY, according to the report. “We continue to focus on alignment of shipment activity with headcount,” Chief Financial Officer Bradley S. Powell said in the report. “Once again, our primary area of increased headcount during the quarter compared to the same quarter last year was in information systems, as we add critical enhancements to further bolster our technology solutions, network and security.” Expeditors repurchased 900,000 shares of common stock in Q2 at an average price of $116.88, according to the report. The company returned $205 million to shareholders in common stock repurchases and dividends, Powell said. FUTURE LOOK: “As we noted in the first quarter, our ability to see much beyond our day-to-day levels of activity remains challenging,” Musser said. “While there are some signs of improving market conditions, there is much uncertainty with regard to demand, capacity and pricing — not to mention unpredictable events with the potential to impact global shipping for days, weeks or even longer.” MARKET REACTION: Shares of Expeditors ( NYSE: EXPD ) we re down 4.23% from market open to $116.07 as of market close today. Expeditors has a market capitalization of $16.8 billion.

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