Market chaos boosts Expeditors; all key indicators post solid Q1 gains

Yahoo

06-05-2025

Expeditors International may end up being a rare transportation company that found the chaos of the first quarter beneficial.
All of the key financial indicators for Expeditors were solidly higher. The formula for its better bottom-line performance: Revenues were up 21%, the cost of purchased transportation and related expenses was up more at 24%, but salaries and other operating expenses rose just 12%.
That led to an increase in operating income of 24%, to $265.9 million from $214.8 million a year earlier. Net earnings were up 20%, to $203.8 million from $169.2 million. Net income per diluted share rose to $1.47 from $1.17 a year earlier.
According to SeekingAlpha, the performance beat consensus forecasts. The $1.47-per-share net income was 12 cents better than the consensus. Revenue of $2.67 billion was $130 million more than forecast.
Head count increased to 19,203 from 18,403, a jump of 4.3%. In the company's prepared statement accompanying its earnings, CFO Bradley Powell said, 'We were again careful not to increase headcount ahead of our ability to grow tonnage and volumes and increase profitability.'
First stock market reaction: down
Despite beating the consensus forecasts, Expeditors stock was down about 3.6% in the first half-hour of trading Tuesday. Its stock is down about 9.2% in the past year.
Expeditors (NYSE: EXPD) does not hold an earnings call with analysts.
The tonnage moved by Expeditors showed significant gains year over year, possibly as a result of 'pull-forward' imports to get in front of tariffs.
The largest jump was for airfreight in March, which was up 15% year over year from the first quarter of 2024. Ocean freight in January was the second-largest increase, up 10% from 2024's corresponding quarter. Every other year-on-year gain for both airfreight and ocean freight was between 5% and 8%.
The overall increase for the quarter was 9% for airfreight and 8% for ocean freight.
A frenzy
In its prepared earnings statement, CEO and President Daniel Wall said current conditions, which he described as a 'frenzied landscape of tariffs, threats of tariffs, shifting geopolitics, and other disruptions,' were the types of conditions that Expeditors often has found positive for its business in the past. But he added, 'I am not sure any of us have ever seen anything like the non-stop, rapidly shifting rules and regulations that have impacted our industry in recent days.'
Wall highlighted some of the features of the markets Expeditors worked in during the quarter. 'Airfreight increased on higher buy and sell rates and growth in tonnage from strong demand, primarily in technology, as importers front-loaded shipments in anticipation of higher trade tariffs,' Wall said. 'Air capacity remained tight due to e‑commerce export demand from North Asia and ongoing re-sourcing to South Asia and India.'