Expeditors Posts Record Profit, Revenues in 2018
Expeditors International of Washington Inc. saw revenues shoot up 18% for both the final quarter of 2018 and the fiscal year, a record-setting accomplishment which company officials attributed to growing but volatile volumes in ocean and airfreight.
“The air and ocean markets have continued to be highly unpredictable,” Jeffrey S. Musser, Expeditors president and CEO, said in a Feb. 19 earnings release. “These are the conditions when our people really prove themselves, as they did in Q4 and throughout the year.”
Net earnings were $179 million, up 7% in the fourth quarter. For 2018, net earnings rose 26%, to $618.2 million. Fourth-quarter earnings per share increased 11% from the same period in 2017, rising to $1.02. For the year, earnings per share shot up 29%, to $3.48, from 2017.
Operating income increased 9% in the quarter, to $217 million. For the year, operating income increased 14%, to $796.6 million, from 2017.
The Seattle-based company said airfreight tonnage volumes increased 2% and ocean container volumes increased 10% in the final quarter of 2018.
“The fourth quarter marked a strong finish to a record year of growth in revenues, net revenues, volumes and profitability,” Musser said, adding his employees worked to profitably grow volumes despite competitive challenges. “We further improved our ocean business by growing volumes while adjusting sell rates. We accomplished all of this in spite of growing rate pressure,” he said.
Bradley Powell, the company’s senior vice president and CFO, noted that 4Q net revenues grew at about twice the rate of headcount and related expenses. He also noted that at nearly 32%, 4Q operating efficiency (operating income as a percentage of net revenue) was the highest since the second quarter of 2016.
Expeditors also saw benefit from a new favorable tax environment, Powell said, noting the company’s effective tax rate dropped from 31.8% in 2017 to 24.3% in 2018. Powell primarily credited the 2017 Tax Cuts and Jobs Act for the reduction.
The company has 176 district offices and numerous branch locations on six continents. Services include consolidation or forwarding of airfreight and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation services, order management, warehousing and distribution and customized logistics.
The company reported its payroll has grown, from 16,944 full-time equivalents worldwide at the end of 2017, to 18,081 at the end of 2018.
Expeditors ranks No. 5 on the Transport Topics Top 50 list of the largest logistics companies in North America.
