Expeditors Q1 earnings dip 9.5 % amid challenging market environment

The Seattle, Wash.-based global logistics provider’s revenues, which industry advisory firm Stifel said were hindered by lower air and ocean rates, tumbled 15.4 percent year-over-year to $1.4 billion for the quarter.    Expeditors International’s net earnings attributable to shareholders for the first quarter of 2016 fell 9.5 percent year-over-year to $96.6 million, according to the company’s most recent unaudited financial statements.
   The Seattle, Wash.-based global logistics company had earnings per share (EPS) of $0.53, in line with industry advisory firm Stifel’s estimate, but just shy of the street consensus estimate of $0.54 per share.
   Revenues for the quarter tumbled 15.4 percent year-over-year to $1.4 billion, which Stifel said were hindered by lower air and ocean rates.
   “It was a difficult comp quarter, as an uncertain amount of temporary airfreight due to the West Coast port disruptions of a year ago helped volumes and profits in 1Q15,” Stifel said.
   On a bright note, Expeditors’ total number of employees as of March 31, 2016 inched up 4.3 percent year-over-year to 15,518 employees, according to the logistics company. A total of 5,652 employees are in North America, which is more than any other region, followed by Europe (2,731 employees) and North Asia (2,457 employees).
   Meanwhile, airfreight tonnage volumes fell 9 percent year-over-year for the quarter, which Stifel said was primarily a result of the difficult West Coast port slowdown comparisons, but trends did improve in March. “Expeditors has more exposure to the transpacific trade lane, which is why its airfreight comps in Q1 2016 are tougher than its European competitors,” Stifel said.
   In addition, ocean container volumes dipped 3 percent from the first quarter of 2015.
   “While volumes and average sell rates in air and ocean were lower compared to both Q1 and Q4 2015, we continued to benefit from available ocean and air carrier capacity and favorable market buying opportunities,” Expeditors Senior Vice President and Chief Financial Officer Bradley S. Powell said.
   Looking ahead, Stifel said it maintains its 2016 and 2017 EPS estimates of $2.40 and $2.65, respectively, and continues to remain buyers of the shares.
   “Expeditors remains one of the ‘haves’ in the global forwarding space (along with Kuehne + Nagel), and we believe its attractive relative valuation makes it a compelling low-risk/low-return idea as a high-quality market share gainer,” Stifel said.