Expeditors International (NASDAQ: EXPD), the Seattle-based international freight forwarder, reported its third-quarter financial results before markets opened on Nov. 5. Expeditors posted diluted earnings per share of $0.92, which were flat year-over-year but beat Wall Street's consensus expectations of $0.90.
Revenues in the quarter decreased 1% year-over-year to $2.1 billion on lower air freight tonnage (down 7% year-over-year) and ocean container volumes (down 2% year-over-year). Net earnings fell 2% to $180 million; earnings per share remained constant because Expeditors bought back stock.
"The third quarter presented challenges that were not unexpected in terms of growth in the global economy and ongoing trade disputes that extend well beyond just the United States and China," said Jeffrey S. Musser, president and chief executive officer in a statement. "We saw volumes drop in our air and ocean products but believe this was consistent with the overall market. In addition to volume changes, we also believe the market experienced corresponding changes in buy/sell rates and we were adept at negotiating in the changing pricing environment."
A spike in customs brokerage revenue saved the quarter for Expeditors, offsetting the loss of high-margin air freight volumes. Customs brokerage revenue increased 15.2% to $774 million. The air freight business suffered from deteriorating rates as well as volumes: While volumes were down 7%, air revenues were down 14.1%.
(Chart: FreightWaves SONAR)
Overall headcount grew 2.4% to 18,192, with growth distributed across every region except North Asia (China), where the number of employees fell 6.4% to 2,483.
On a regional basis, North Asia had the biggest revenue delta, down 16% year-over-year to $624 million. In North America, revenues grew by 15% year-over-year to $692 million, becoming Expeditors' largest region by revenue. European revenues decreased 2% to $320 million.
(Table: Expeditors International financial statements)
Management did not offer forward-looking guidance in the release.
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