Expeditors Gears Up to Report Q1 Earnings: What's in the Cards?

Globe and Mail

01-05-2025

Expeditors International of Washington EXPD is scheduled to report its first-quarter 2025 results on May 6, before market open.
The Zacks Consensus Estimate for EXPD's first-quarter 2025 earnings is currently pegged at $1.30 per share. The estimate has been revised 1.6% upward in the past 60 days.
The Zacks Consensus Estimate for first-quarter 2025 revenues is presently pegged at $2.43 billion. In the March quarter, the transportation company is expected to report an 11.1% year-over-year increase in earnings.
The company has an encouraging earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the preceding four quarters and missed once. The average beat is 11.6%.
Expeditors International of Washington Price and EPS Surprise
Expeditors International of Washington price-eps-surprise | Expeditors International of Washington Quote
Given this backdrop, let us examine the factors that might have influenced Expeditors' performance in the quarter to be reported.
Factors to Note Ahead of EXPD's Q1 Results
We expect the company's first-quarter performance to have been aided by high revenues. Our estimate for first-quarter Airfreight Services and ocean freight and services is pegged at $786 million and $625.3 million, respectively, which indicates an increase of 3.5% and 9.6% from the year-ago reported figure. Customs brokerage and other services are pegged at $894 million, indicating a 2% increase from first-quarter 2024 actuals.
Despite Expeditors having significant exposure to China, the silver lining is that since the first quarter covered a period (January-March) of normal business and the new tariffs took effect in the second quarter, tariff woes are unlikely to be reflected in the numbers of the March quarter.
On the contrary, we expect increasing operating expenses to have hindered EXPD's bottom-line performance in the first quarter of 2025. This rise in operating expenses is anticipated to have been primarily caused by the increase in salaries and related costs. Our estimate for total operating expenses in the to-be-reported quarter has jumped 5% year over year.
What Our Model Says About EXPD
Our proven model predicts an earnings beat for Expeditors this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here.
Expeditors has an Earnings ESP of +3.76% (the Most Accurate Estimate is currently pegged at $1.35 per share, 5 cents above the Zacks Consensus Estimate). (See the Zacks Earnings Calendar to stay ahead of market-making news.)
EXPD carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
You can see the complete list of today's Zacks #1 Rank stocks here.
EXPD's Q4 Highlights
Expeditors' fourth-quarter 2024 earnings of $1.68 per share beat the Zacks Consensus Estimate of $1.43. The bottom line increased 54.1% year over year, owing to strong growth in air tonnage and ocean volumes. Total revenues of $3 billion beat the Zacks Consensus Estimate of $2.62 billion and increased 29.7% year over year.
Airfreight tonnage and ocean container volume increased 11% and 14%, respectively, year over year. Operating income increased 51% year over year to $301 million. Total operating expenses increased 24% to $2.65 billion.
Q1 Performances of Some Other Transportation Companies
United Airlines ' UAL first-quarter 2025 earnings per share (excluding 25 cents from non-recurring items) of 91 cents surpassed the Zacks Consensus Estimate of 75 cents. In the year-ago quarter, the Chicago-based airline reported a loss of 15 cents per share.
Operating revenues of $13.21 billion fell marginally short of the Zacks Consensus Estimate of $13.22 billion. The top line increased 5.4% year over year despite the tariff-induced slowdown in domestic air travel demand. Passenger revenues (which accounted for 89.7% of the top line) rose 4.8% to $11.9 billion. UAL flights transported 40,806 passengers in the first quarter, up 3.8% year over year.
Delta Air Lines DAL reported first-quarter 2025 earnings (excluding 9 cents from non-recurring items) of 46 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents. Earnings increased 2.2% on a year-over-year basis due to low fuel costs.
Revenues in the March-end quarter were $14.04 billion, surpassing the Zacks Consensus Estimate of $13.81 billion and increasing 2.1% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) rose 3.3% year over year to $13 billion.
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This article originally published on Zacks Investment Research (zacks.com).