Expeditors' Volumes Rise as Rates Hinder Profits
Fourth-quarter business boomed, but profits dipped at freight forwarder Expeditors International of Washington Inc. as roller-coaster pricing made management difficult, the Seattle-based firm said in its Feb. 21 earnings statement.
No. 5 on the Transport Topics Top 50 list of the largest logistics companies in North America, Expeditors earned $110.6 million, or 61 cents a share, compared with $114.4 million, or 61 cents, during the final three months of 2015. Earnings per share remained constant as diluted shares outstanding contracted.
Quarterly revenue increased to $1.64 billion from $1.6 billion, and net revenue, which subtracts purchased transportation costs, also rose to $548.6 million from $536.2 million, year-over-year.
Expeditors CEO Jeffrey Musser gave a good news/bad news analysis in the release, starting with, “We shipped the most freight in our company’s history and gained market share in the fourth quarter, as we did throughout 2016.”
For the quarter, both air and ocean freight handled grew by 12%, year-over-year.
The challenge for the forwarder was dealing with “truly unprecedented rate volatility,” a factor that put “unusual pressure on our margins.” Musser said company management is “improving processes to better address the rapid changes in buy and sell rates.”
For the year, Expeditors had net income of $430.8 million, or $2.36 a share, down from $457.2 million, or $2.40, in 2015.
Annual revenue dipped to $6.1 billion from $6.62 billion, and net revenue declined to $2.16 billion from $2.19 billion.
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