Expeditors International Q3 Profit Up 4%, But Results Miss Estimates

(RTTNews) - Global logistics company Expeditors International of Washington, Inc. (EXPD) on Tuesday reported a 4 percent increase in profit for the third quarter from last year on slightly higher revenues.

However, both revenue and earnings per share for the quarter missed analysts' expectations, reflecting lower market ocean rates and an airfreight peak season that did not materialize in September. The company's shares are down more than 7 percent in the regular trading session.

Peter Rose, Chairman and Chief Executive Officer of Expeditors International said, "Despite ongoing pricing volatility in the ocean markets and an air peak season that didn't commence in September, as anticipated, we executed well in our 2013 third quarter. Our operating margin remained above our efficiency target point of 30% and our year-over-year growth in ocean and air volumes, 9% in ocean container volumes and 3% in air tonnage, is similar to the trends we've experienced over the past several quarters."

The Seattle, Washington-based company's third-quarter net earnings attributable to shareholders rose to $92.40 million or $0.45 per share, from $88.49 million or $0.42 per share in the year-ago period. On average, 20 analysts polled by Thomson Reuters expected the company to report profit per share of $0.49 for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter edged up to $1.54 billion from $1.53 billion in the year-ago period and missed analysts' consensus revenue estimate of $1.59 billion.

Airfreight services revenues rose 1 percent to $628.12 million, while ocean freight and ocean services revenues declined 4 percent to $525.19 million. Customs brokerage and other services generated revenues of $381.78 million, up 6 percent from the same quarter last year.

Rose added, "The ocean market remains very volatile and yet again, we've seen increases in ocean volumes be outpaced by the proliferation of excess carrier capacity. The carriers attempted to impose general rate increases and despite some temporary success early in the quarter, were generally unsuccessful and market ocean rates continued their downward slide."

Looking ahead, Expeditors noted that while the much-awaited airfreight peak season not materialize in September, some of that anticipated volume as evidenced by backlogs in key export markets, particularly in Asia, seemed to have manifested itself in October. According to the company, this was in part due to planned new product launches and a gearing up for the November and December holiday season.

In Tuesday's regular session, EXPE is trading at $42.88, down $3.41 or 7.37 percent on a volume of 620,558 shares.