Expeditors Shares Dip on Q4 Earnings Miss - Analyst Blog
February 26 2014 - 12:00PM
Zacks
Expeditors International of
Washington Inc.’s (EXPD) quarterly performance continues
to lack luster. The company reported fourth quarter 2013 adjusted
earnings of 41 cents per share, widely missing the Zacks Consensus
Estimate of 47 cents. The results, however, improved 2.5% from the
year ago earnings of 40 cents per share.
In 2014, earnings per share
increased 7% year over year to $1.68 but failed to beat the Zacks
Consensus Estimate of $1.76. The stock reacted negatively to the
news ending the day with a 7% decline.
Total revenue rose 5.9% year over
year to $1.62 billion and surpassed the Zacks Consensus Estimate of
$1.56 billion. Revenues for the year improved 1.5% year over year
to $6.01 billion. Although air and ocean freight volumes remained
steady, ocean freight pricing was weak, owing to their overcapacity
concerns caused by slow economic recovery.
Gross profit (net revenue)
increased 4% year over year in the fourth quarter to $478.1 million
while in 2013 it increased 3% to $1,882.8 million. Gross margin
(yield) was 29.4%, down from 30.1% in the year-ago quarter. Gross
margin for the year was 31.0%, up from 30.6% in the year-ago
period.
In the fourth quarter, operating
income improved 4.4% to $133.6 million while during the year it
increased 4.1% to $552.1 million.
Revenue
Segments
Airfreight Services revenues
improved 5.9% year over year to $742.4 million in the fourth
quarter.
Ocean Freight and Ocean Services
revenues increased 4.9% year over year to $495.6 million.
Customs Brokerage and Other
Services revenues rose 7.0% year over year to $387.9 million.
Liquidity
Expeditors’ exited 2013 with cash
and cash equivalents of $1247.6 million as compared to $1,260.8
million in 2012. Operating cash flows were $407.5 million compared
with $370.1 million in the prior year.
Dividend
The company paid a semiannual cash
dividend of 30 cents per share on Dec 16, 2013 to shareholders of
record as of Dec 2.
Other Stocks
Another logistics company,
C.H. Robinson Worldwide Inc. (CHRW), reported
fourth-quarter results on Feb 4, 2014 after market close. The
company’s adjusted earnings of 62 cents failed to beat the Zacks
Consensus Estimate of 68 cents.
Currently, Expeditors carries a
Zacks Rank #2 (Buy). Other stocks worth considering in this sector
include P.A.M Transportation Services Inc. (PTSI)
and Covenant Transportation Group Inc. (CVTI).
PTSI has a Zacks Rank #1 (Strong Buy) while CVTI carries a Zacks
Rank #2.
Our Analysis
For the long term, we believe
Expeditors is poised for growth based on its strategic initiatives,
asset-light business model and growing supply chains. Continued
strength in the airfreight business owing to growing trade between
the U.S. and China also bodes well.
Nevertheless, we remain cautious
about weak consumer and business demand as well as delay in
manufacturing, which might hurt the company’s revenues. Sluggish
economic growth and higher freight rates charged by third party
carriers are other near-term headwinds for the company.
CH ROBINSON WWD (CHRW): Free Stock Analysis Report
COVENANT TRANS (CVTI): Free Stock Analysis Report
EXPEDITORS INTL (EXPD): Free Stock Analysis Report
PAM TRANSPORT (PTSI): Get Free Report
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