Earnings, Revenue Dip at Expeditors International
Third-quarter air and ocean volumes increased for freight forwarder Expeditors International of Washington, but profit margins declined, leading to dips in revenue and net income for both the three- and nine-month periods ended Sept. 30, the Seattle-based firm said Nov. 8.
No. 5 on the Transport Topics Top 50 list of the largest logistics companies in the U.S., Canada and Mexico, Expeditors had net income of $107.6 million, or 59 cents a share, on quarterly revenue of $1.56 billion. During the same period in 2015, the company earned $118.3 million, or 62 cents, on revenue of $1.65 billion.
“We grew our business even as rates were rapidly adjusting to a very fluid marketplace and pressuring margins beyond what we would normally expect,” said Expeditors CEO Jeffrey Musser in the company’s earnings release.
Kilograms of airfreight managed grew by 7%, year-over-year, during the third quarter, while ocean freight handled rose by 3% — with the ocean volume improving steadily from July through September.
The bankruptcy of South Korea-based Hanjin Shipping Co. played a part on the ocean results, Musser said.
“Ocean carriers modified pricing as the market endured a significant disruption with the bankruptcy of one of the world’s larger shipping companies. Because of those events, the current rate environment was more unpredictable than usual,” he said.
Year to date through September, Expeditors earned $320.2 million, or $1.75 a share, on revenue of $4.46 billion. Through three quarters of 2015, the company earned $342.8 million, or $1.79, on revenue of $5.02 billion.
The decline in costs for purchased transportation moderated during the third quarter. It dropped by 5.9%, year-over-year, to $1.02 billion during the quarter. For the nine-month period, it fell by 15.7% to $2.84 billion.
