Expeditors International of Washington Inc.

11/05/2024 | Press release | Distributed by Public on 11/05/2024 07:37

Expeditors Reports Third Quarter 2024 EPS of $1.63

Expeditors Reports Third Quarter 2024 EPS of $1.63

Nov 05, 2024

Expeditors Reports Third Quarter 2024 EPS of $1.63

BELLEVUE, Wash.--(BUSINESS WIRE)-- Expeditors International of Washington, Inc. (NYSE:EXPD) today announced third quarter 2024 financial results including the following comparisons to the same quarter of 2023:

  • Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 41% to $1.63
  • Net Earnings Attributable to Shareholders increased 34% to $230 million
  • Operating Income increased 40% to $302 million
  • Revenues increased 37% to $3.0 billion
  • Airfreight tonnage increased 19% and ocean container volume increased 12%

1Diluted earnings attributable to shareholders per share.

NOTE: See Disclaimer on Forward-Looking Statements in this release.

"We have worked hard over this past year to gain additional volumes and grow our business by winning new customers and gaining additional business with current customers," said Jeffrey S. Musser, President and Chief Executive Officer. "These positive third-quarter results reflect those efforts in securing higher tonnage and volumes, which were further boosted as some shippers pulled freight forward out of concern over port actions and geopolitical disruptions, and in advance of fourth quarter holiday sales. Geopolitical events continued to impact pricing and the flow of freight during the quarter. Ocean transit times remained extended because carriers avoided the Red Sea and were further disrupted by prior concerns over potential port strikes. Air capacity is too scarce and costly to serve as a viable widespread alternative for most shippers.

"Strong growth in air tonnage and ocean volumes had a positive impact on all areas of our business during the quarter. Air tonnage and rates increased across all regions. Direct e-commerce continued to absorb available air freight capacity and boost rates on North Asia exports, and manufacturing relocations and sea-to-air conversions drove higher rates on exports from South Asia. Higher volumes moving through our network led to an increase in fees for customs brokerage and other ancillary services, in addition to new road freight business and growth in order management services. All in all, I would be hard pressed to point to an area of our business where our people did not perform at their highest level.

"We would again caution that our ability to see much beyond our day-to-day levels of activity remains challenging. We believe that ocean rates may decline if demand softens and capacity increases, particularly if commerce on the Red Sea returns to normal. We also believe that global freight markets and pricing are likely to remain volatile for some time. Unpredictable events seem to occur with such increased regularity as to make us wonder if disruption is the new state of normal. Regardless, we remain focused on servicing our current customers and gaining market share, while keeping costs in check."

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, "We handled increased volumes and tonnage in the third quarter and executed well throughout our network, while keeping headcount flat and controlling operating expenses. Our measure of operating efficiency (operating income as a percentage of revenue less directly related cost of transportation and other expenses) is now back to our 30% target for the year to date. We continue to control and carefully manage our cash, while working to improve operational efficiencies and return capital to investors."

Mr. Powell noted that the Company repurchased $140 million in common stock during the third quarter of 2024, and $603 million year to date.

Expeditors is a global logistics company headquartered in Bellevue, Washington. The Company employs trained professionals in 176 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 statements contained in this news release are "forward-looking statements," based on management's views with respect to future events and underlying assumptions that involve risks and uncertainties. These forward-looking statements include statements regarding inflation; continued growth in air and ocean carrier capacity and the impact on rates; unpredictability in the ocean and air markets, including uncertainty due to conflicts in the Middle East and Red Sea; port actions and other labor disruptions; new capacity in the marketplace; longer ocean transit times; strong e-commerce demand in the air market; and volatile rates. Future financial performance could differ materially because of factors such as: our ability to secure higher air tonnage and ocean volumes; our ability to keep headcount and other costs in check while continuing to generate efficiency that meets our historical expectations; the alignment of our variable compensation structure with performance; our ability to enhance and bolster our network security; that management is able to grow the business and explore new areas for profitable growth; our ability to leverage the strength of our carrier relationships; the strength of our non-asset-based operating model; and our ability to remain a strong, healthy, unified and resilient organization. Geo-political risks, port actions and other labor disruptions, and the current uncertainty in the global economy could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation and contingencies, including risks associated with tax audits, as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission. These and other factors are discussed in the Company's regulatory filings with the Securities and Exchange Commission, including those in "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and the Company's most recent Form 10-Q. The forward-looking statements contained in this news release speak only as of this date and the Company does not assume any obligation to update them except as required by law.

Expeditors International of Washington, Inc.

Third Quarter 2024 Earnings Release, November 5, 2024

Financial Summary for the three months ended September 30, 2024 and 2023 (Unaudited)

(in 000's of US dollars except share data)

Three months ended September 30,

Nine months ended September 30,

2024

2023

% Change

2024

2023

% Change

Revenues

$

3,000,131

$

2,190,001

37

%

$

7,645,810

$

7,022,342

9

%

Directly related cost of transportation and other expenses 1

$

2,093,964

$

1,402,111

49

%

$

5,166,652

$

4,540,396

14

%

Salaries and other operating expenses2

$

604,643

$

571,821

6

%

$

1,738,939

$

1,741,411

(0

)%

Operating income

$

301,524

$

216,069

40

%

$

740,219

$

740,535

(0

)%

Net earnings attributable to shareholders

$

229,574

$

171,353

34

%

$

574,195

$

594,164

(3

)%

Diluted earnings attributable to shareholders per share

$

1.63

$

1.16

41

%

$

4.04

$

3.92

3

%

Basic earnings attributable to shareholders per share

$

1.63

$

1.16

41

%

$

4.06

$

3.95

3

%

Diluted weighted average shares outstanding

141,027

148,001

142,288

151,619

Basic weighted average shares outstanding

140,417

147,099

141,540

150,543

1Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings.

2Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings.

During the three and nine months ended September 30, 2024 we repurchased 1.2 million and 5.1 million shares of common stock at an average price of $118.47 and $119.21 per share. During the three and nine months ended September 30, 2023 we repurchased 2.6 million and 10.5 million shares of common stock at an average price of $116.29 and $113.97 per share.

Employee Full-time Equivalents as of

September 30, 2024

September 30, 2023

North America

6,920

6,975

Europe

3,838

3,811

North Asia

2,271

2,290

South Asia

1,776

1,709

Middle East, Africa and India

1,386

1,440

Latin America

780

753

Information Systems

1,303

1,244

Corporate

416

403

Total

18,690

18,625

Third quarter year-over-year percentage increase (decrease) in:

2024

Airfreight
kilos

Ocean freight
FEU

July

20%

8%

August

17%

14%

September

20%

15%

Quarter

19%

12%

Investors may submit written questions via e-mail to: [email protected]. Questions received by the end of business on November 8, 2024 will be considered in management's 8-K "Responses to Selected Questions."

___________________________
 NOTE: See Disclaimer on Forward-Looking Statements in this release.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

September 30, 2024

December 31, 2023

Assets:

Current Assets:

Cash and cash equivalents

$

1,293,173

$

1,512,883

Accounts receivable, less allowance for credit loss of $5,903 at September 30, 2024 and $6,550 at December 31, 2023

2,176,959

1,532,599

Deferred contract costs

431,640

218,807

Other

181,273

170,907

Total current assets

4,083,045

3,435,196

Property and equipment, less accumulated depreciation and amortization $624,562 at September 30, 2024 and $597,473 at December 31, 2023

468,594

479,225

Operating lease right-of-use assets

525,810

516,280

Goodwill

7,927

7,927

Deferred federal and state income taxes, net

69,789

63,690

Other assets, net

15,752

21,491

Total assets

$

5,170,917

$

4,523,809

Liabilities:

Current Liabilities:

Accounts payable

$

1,240,174

$

860,856

Accrued liabilities, primarily salaries and related costs

470,723

447,336

Contract liabilities

532,289

280,909

Current portion of operating lease liabilities

106,832

99,749

Federal, state and foreign income taxes

25,728

15,562

Total current liabilities

2,375,746

1,704,412

Noncurrent portion of operating lease liabilities

436,001

427,984

Shareholders' Equity:

Preferred stock, none issued

-

-

Common stock, par value $0.01 per share. Issued and outstanding: 139,971 shares at September 30, 2024 and 143,866 shares at December 31, 2023

1,400

1,439

Additional paid-in capital

4,307

-

Retained earnings

2,540,978

2,580,968

Accumulated other comprehensive loss

(189,978

)

(192,057

)

Total shareholders' equity

2,356,707

2,390,350

Noncontrolling interest

2,463

1,063

Total equity

2,359,170

2,391,413

Total liabilities and equity

$

5,170,917

$

4,523,809

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)

Three months ended September 30,

Nine months ended September 30,

2024

2023

2024

2023

Revenues:

Airfreight services

$

986,950

$

724,331

$

2,606,647

$

2,380,405

Ocean freight and ocean services

1,017,618

560,281

2,240,079

1,851,389

Customs brokerage and other services

995,563

905,389

2,799,084

2,790,548

Total revenues

3,000,131

2,190,001

7,645,810

7,022,342

Operating Expenses:

Airfreight services

740,356

516,519

1,923,115

1,707,568

Ocean freight and ocean services

783,827

387,670

1,675,931

1,277,159

Customs brokerage and other services

569,781

497,922

1,567,606

1,555,669

Salaries and related

450,308

412,505

1,289,901

1,290,911

Rent and occupancy

61,024

58,387

181,873

174,224

Depreciation and amortization

15,774

15,607

45,914

46,374

Selling and promotion

7,589

6,149

22,366

18,847

Other

69,948

79,173

198,885

211,055

Total operating expenses

2,698,607

1,973,932

6,905,591

6,281,807

Operating income

301,524

216,069

740,219

740,535

Other Income (Expense):

Interest income

9,917

17,156

36,699

53,723

Other, net

973

(1,334

)

4,599

4,394

Other income, net

10,890

15,822

41,298

58,117

Earnings before income taxes

312,414

231,891

781,517

798,652

Income tax expense

82,488

61,048

206,040

206,018

Net earnings

229,926

170,843

575,477

592,634

Less net earnings (losses) attributable to the noncontrolling interest

352

(510

)

1,282

(1,530

)

Net earnings attributable to shareholders

$

229,574

$

171,353

$

574,195

$

594,164

Diluted earnings attributable to shareholders per share

$

1.63

$

1.16

$

4.04

$

3.92

Basic earnings attributable to shareholders per share

$

1.63

$

1.16

$

4.06

$

3.95

Weighted average diluted shares outstanding

141,027

148,001

142,288

151,619

Weighted average basic shares outstanding

140,417

147,099

141,540

150,543

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three months ended September 30,

Nine months ended September 30,

2024

2023

2024

2023

Operating Activities:

Net earnings

$

229,926

$

170,843

$

575,477

$

592,634

Adjustments to reconcile net earnings to net cash from operating activities:

Provisions for (recoveries) losses on accounts receivable

(582

)

1,411

1,456

2,316

Deferred income tax benefit

(1,057

)

(6,418

)

(5,680

)

(7,942

)

Stock compensation expense

9,760

15,879

47,836

46,962

Depreciation and amortization

15,774

15,607

45,914

46,374

Other, net

162

2,673

4,032

6,396

Changes in operating assets and liabilities:

(Increase) decrease in accounts receivable

(301,167

)

(53,722

)

(647,794

)

629,205

Increase (decrease) in accounts payable and accrued liabilities

107,535

40,919

402,818

(311,990

)

(Increase) decrease in deferred contract costs

(30,657

)

(56,917

)

(216,977

)

28,870

Increase (decrease) in contract liabilities

50,527

74,701

254,902

(33,549

)

Increase (decrease) in income taxes payable, net

20,331

(4,017

)

13,163

(97,743

)

Increase in other, net

(10,580

)

(10,979

)

(1,502

)

(6,695

)

Net cash from operating activities

89,972

189,980

473,645

894,838

Investing Activities:

Purchase of property and equipment

(12,291

)

(7,993

)

(30,415

)

(28,600

)

Other, net

(225

)

10

(62

)

(209

)

Net cash from investing activities

(12,516

)

(7,983

)

(30,477

)

(28,809

)

Financing Activities:

Proceeds (payments) on borrowings on lines of credit, net

10,445

6,913

(5,538

)

(6,683

)

Proceeds from issuance of common stock

53,256

61,841

67,734

80,305

Repurchases of common stock

(140,031

)

(298,103

)

(602,855

)

(1,199,294

)

Dividends paid

-

-

(102,638

)

(102,263

)

Payments for taxes related to net share settlement of equity awards

-

-

(15,348

)

(19,501

)

Net cash from financing activities

(76,330

)

(229,349

)

(658,645

)

(1,247,436

)

Effect of exchange rate changes on cash and cash equivalents

20,194

(11,807

)

(4,233

)

(13,296

)

Change in cash and cash equivalents

21,320

(59,159

)

(219,710

)

(394,703

)

Cash and cash equivalents at beginning of period

1,271,853

1,698,587

1,512,883

2,034,131

Cash and cash equivalents at end of period

$

1,293,173

$

1,639,428

$

1,293,173

$

1,639,428

Taxes Paid:

Income taxes

$

63,046

$

61,603

$

196,649

$

306,059

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Business Segment Information

(In thousands)

(Unaudited)

UNITED
STATES

OTHER
NORTH
AMERICA

LATIN
AMERICA

NORTH
ASIA

SOUTH
ASIA

EUROPE

MIDDLE
EAST,
AFRICA
AND
INDIA

ELIMI-
NATIONS

CONSOLI-
DATED

For the three months ended September 30, 2024:

Revenues

$

854,679

114,264

61,981

914,417

445,308

433,660

177,145

(1,323

)

3,000,131

Directly related cost of transportation and other expenses1

$

443,930

67,626

38,973

763,781

369,905

279,235

131,098

(584

)

2,093,964

Salaries and other operating expenses2

$

253,452

35,261

18,605

86,566

51,307

126,917

33,283

(748

)

604,643

Operating income

$

157,297

11,377

4,403

64,070

24,096

27,508

12,764

9

301,524

Identifiable assets at period end

$

2,611,417

192,370

108,985

727,724

376,283

863,840

319,627

(29,329

)

5,170,917

Capital expenditures

$

9,299

198

101

296

839

1,548

10

-

12,291

Equity

$

1,628,893

35,825

42,670

221,519

124,387

182,515

164,665

(41,304

)

2,359,170

For the three months ended September 30, 2023:

Revenues

$

784,503

106,293

47,327

515,340

207,006

410,904

119,849

(1,221

)

2,190,001

Directly related cost of transportation and other expenses1

$

421,432

63,671

28,409

398,681

145,292

263,524

81,643

(541

)

1,402,111

Salaries and other operating expenses2

$

261,323

38,275

16,405

66,546

42,138

120,436

27,351

(653

)

571,821

Operating income

$

101,748

4,347

2,513

50,113

19,576

26,944

10,855

(27

)

216,069

Identifiable assets at period end

$

2,572,404

200,711

110,708

512,746

217,018

726,729

260,619

(22,814

)

4,578,121

Capital expenditures

$

3,762

302

84

168

409

1,369

1,899

-

7,993

Equity

$

1,797,123

46,264

54,096

225,229

91,712

154,617

161,882

(39,449

)

2,491,474

UNITED
STATES

OTHER
NORTH
AMERICA

LATIN
AMERICA

NORTH
ASIA

SOUTH
ASIA

EUROPE

MIDDLE
EAST,
AFRICA
AND
INDIA

ELIMI-
NATIONS

CONSOLI-
DATED

For the nine months ended September 30, 2024:

Revenues

$

2,385,392

331,837

151,787

2,096,709

960,970

1,241,432

481,600

(3,917

)

7,645,810

Directly related cost of transportation and other expenses1

$

1,270,981

199,710

88,077

1,702,401

757,167

796,205

353,839

(1,728

)

5,166,652

Salaries and other operating expenses2

$

772,835

102,684

49,920

224,588

135,303

363,718

92,099

(2,208

)

1,738,939

Operating income

$

341,576

29,443

13,790

169,720

68,500

81,509

35,662

19

740,219

Identifiable assets at period end

$

2,611,417

192,370

108,985

727,724

376,283

863,840

319,627

(29,329

)

5,170,917

Capital expenditures

$

17,775

2,172

383

933

2,938

4,860

1,354

30,415

Equity

$

1,628,893

35,825

42,670

221,519

124,387

182,515

164,665

(41,304

)

2,359,170

For the nine months ended September 30, 2023:

Revenues

$

2,535,945

326,398

151,994

1,607,788

631,001

1,386,284

386,524

(3,592

)

7,022,342

Directly related cost of transportation and other expenses1

$

1,387,511

201,984

90,139

1,238,996

437,392

924,592

261,482

(1,700

)

4,540,396

Salaries and other operating expenses2

$

785,282

108,892

52,172

205,976

132,984

373,004

85,003

(1,902

)

1,741,411

Operating income

$

363,152

15,522

9,683

162,816

60,625

88,688

40,039

10

740,535

Identifiable assets at period end

$

2,572,404

200,711

110,708

512,746

217,018

726,729

260,619

(22,814

)

4,578,121

Capital expenditures

$

15,829

932

360

1,110

744

6,688

2,937

-

28,600

Equity

$

1,797,123

46,264

54,096

225,229

91,712

154,617

161,882

(39,449

)

2,491,474

1 Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings.

2Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241104783314/en/

Jeffrey S. Musser

President and Chief Executive Officer

(206) 674-3433

Bradley S. Powell

Senior Vice President and Chief Financial Officer

(206) 674-3412

Geoffrey Buscher

Director - Investor Relations

(206) 892-4510

Source: Expeditors International of Washington, Inc.

Back to 2024