Expeditors Reports Third Quarter 2018 EPS of $0.92
SEATTLE--(BUSINESS WIRE)--Nov 6, 2018--Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced third quarter 2018 financial results including the following highlights compared to the same quarter of 2017:Diluted Net Earnings Attributable to Shareholders per share (EPS 1 ) increased 39% to $0.92 Net Earnings Attributable to Shareholders increased 35% to $163 million Operating Income increased 9% to $203 million Revenues increased 16% to $2.1 billion Net Revenues 2 increased 10% to $661 million Airfreight tonnage volume increased 1% and ocean container volume increased 8%
“We generated record third quarter profitability, with the highest net revenue and operating income in our history, as we continued to win new business and grow volumes with existing customers in an unpredictable rate environment,” said Jeffrey S. Musser, President and Chief Executive Officer. “Capacity in both the air and ocean markets remained tight in many lanes. Carriers continued to take advantage of the supply and demand imbalance and sought opportunities to increase pricing in an effort to improve profitability. That presented a challenge, particularly in ocean, requiring that we work our strong relationships to secure space for our customers, while remaining disciplined on pricing.
“We continue to focus on providing outstanding service to our customers, especially in these times of uncertainty surrounding potential trade conflicts,” Mr. Musser continued. “Rates have been particularly volatile, but we have managed through similar cycles throughout our history and are adept at making adjustments to deliver quality growth over the long term. I commend our people for their exceptional efforts on behalf of our customers and our organization.”
Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “We managed expenses well during a period of rapid changes in pricing to drive operational efficiency (operating income as a percentage of net revenue) back above 30%. Once again, our double-digit net revenue increase outpaced our growth in headcount, as we invest in people, new projects, and core technologies in support of profitable growth.” Mr. Powell also noted that the Company’s effective tax rate for the three months was 21.8%, compared to 36.7% a year ago. In addition to the lower U.S. federal tax rate that resulted from the 2017 Tax Act, the effective tax rate in the most recent quarter benefited from certain discrete adjustments as a result of recent interpretations related to the 2017 Tax Act amounts and a State income tax refund. Mr. Powell emphasized that the Company’s effective tax rate in future periods will largely depend on the mix of pretax earnings that are generated in its U.S. versus foreign operations, further interpretation and guidance to be issued on the new tax law and discrete items that occur in the reporting periods.
Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 177 district offices and numerous branch locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution and customized logistics solutions.
Disclaimer on Forward-Looking Statements:
Certain portions of this release contain forward-looking statements, which are based on certain assumptions and expectations of future events that are subject to risks and uncertainties, including comments on our ability to secure space for our customers at a reasonable cost, manage through a volatile rate cycle, deliver quality growth over the long term, manage expenses, drive operational efficiency, and generate profitable market growth; the impact of the 2017 Tax Act and related interpretations on our effective tax rate; energy and fuel prices; political changes; changes and uncertainties in governmental policies and inter-governmental disputes; foreign exchange rates; regulatory actions or changes; and risk factors and uncertainties detailed in our Annual Report as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission.
During the three and nine-month periods ended September 30, 2018, we repurchased 2.0 million and 7.8 million shares of common stock at an average price of $73.47 and $71.58 per share, respectively. During the three and nine-month periods ended September 30, 2017, we repurchased 3.6 million and 6.1 million shares of common stock at an average price of $56.18 and $55.93 per share, respectively.
Investors may submit written questions via e-mail to: . Questions received by the end of business on November 9, 2018 will be considered in management’s 8-K “Responses to Selected Questions” expected to be filed on or about November 29, 2018.
Net Revenues (Non-GAAP measure)
We commonly refer to the term “net revenues” when commenting about our Company and the results of its operations. Net revenues are a Non-GAAP measure calculated as revenues less directly related operations expenses attributable to the Company’s principal services. We believe that net revenues are a better measure than are total revenues when analyzing and discussing our effectiveness in managing our principal services since total revenues earned as a freight consolidator must consider the carriers’ charges to us for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by us. Net revenues are one of our primary operational and financial measures and demonstrates our ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings. Using net revenues also provides a commonality for comparison among various services. The following table presents the calculation of net revenues.
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CONTACT: Expeditors International of Washington, Inc.
Jeffrey S. Musser, 206-674-3433
President and Chief Executive Officer
Bradley S. Powell, 206-674-3412
Senior Vice President and Chief Financial Officer
Geoffrey Buscher, 206-892-4510
Director - Investor Relations
KEYWORD: UNITED STATES NORTH AMERICA WASHINGTON
INDUSTRY KEYWORD: TRANSPORT AIR MARITIME RAIL TRUCKING LOGISTICS/SUPPLY CHAIN MANAGEMENT
SOURCE: Expeditors International of Washington, Inc.
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PUB: 11/06/2018 08:30 AM/DISC: 11/06/2018 08:30 AM