Expeditors raises revenue, warns of “challenging” 4th quarter
Seattle-based Expeditors International of Washington, Inc. reported Tuesday strong growth in both revenue and earnings for the third quarter, but warnings of more difficult trading conditions in the fourth quarter sent its stock price down 12 percent.Third-quarter net earnings soared 32 percent to $43.1 million from the same quarter of 2003, as gross revenues rose 26 percent to $897.2 million. Gross revenue from air freight increased 32 percent to $406.8 million, with gross revenue from ocean freight and services up 18 percent to $335.9 million. Net revenues for the third quarter increased 22 percent to $240.4 million.
Air freight tonnage was up 27 percent in the latest quarter and the number of maritime containers moved by the company’s non-vessel-operating common carrier arm increased 24 percent.
Expeditors also reported margin pressures for air and ocean products.
“Fortunately, the increases in cargo volume allowed us to compensate for the higher carrier costs, particularly in ocean freight,” said Peter J. Rose, chairman and chief executive officer of Expeditors.
Rose also warned: “The fourth quarter is shaping up to be a challenge.”
In response to ever rising fuel costs, the asset-based carriers are raising surcharges “so rapidly that it is a real chore to smoothly communicate market conditions to our customers,” Rose added.
After a bull run in the past seven months, Expeditors’ stock on the Nasdaq exchange fell 12 percent Tuesday to $50.70.
“People really consider Expeditors to kind of be the bellwether of the industry, and I think the fact that they did not beat consensus estimates is really the driving factor here,” Reuters quoted an investment analyst as saying when commenting about the stock fall.
