10-KPeriod: FY2017

EXPEDITORS INTERNATIONAL OF WASHINGTON INC Annual Report, Year Ended Dec 31, 2017

Filed February 23, 2018For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) reported robust performance in its 2017 10-K filing, demonstrating growth across its core logistics services. The company generated total revenues of $6.92 billion and net revenues of $2.32 billion. Net earnings attributable to shareholders saw a healthy increase to $489.3 million, or $2.69 per diluted share, reflecting improved operational efficiency and strategic execution. The company's strategy continues to focus on organic growth, leveraging its integrated information systems and extensive global network of approximately 16,500 employees across 177 district offices. Expeditors emphasizes tailored solutions and targeted marketing, focusing on specific markets and customers that drive profitable growth. Key strategic initiatives include aligning market growth with its services, enhancing its import presence in China, and expanding market share in North America.

Financial Highlights

43 data points
Beta

Revenue

$6.92B

Net Income

$489.35M

7.1% Net Margin

EPS (Diluted)

$2.69

Total Assets

$3.12B

Cash & Equivalents

$1.05B

Free Cash Flow

$488.64M

Financial Statements
Beta
Revenue$6.92B
Operating Expenses$6.22B
Operating Income$700.26M
Net Income$489.35M
EPS (Basic)$2.73
EPS (Diluted)$2.69
Shares Outstanding (Basic)179.25M
Shares Outstanding (Diluted)181.67M

Key Highlights

  • 1Total revenues reached $6.92 billion, with net revenues of $2.32 billion, showcasing strong operational execution in a competitive global logistics market.
  • 2Net earnings attributable to shareholders increased to $489.3 million, or $2.69 per diluted share, demonstrating effective cost management and revenue generation.
  • 3The company's diversified service portfolio, including airfreight, ocean freight, and customs brokerage, contributed to stable revenue streams, with customs brokerage and other services showing significant net revenue growth of 9% year-over-year.
  • 4Expeditors maintains a strong financial position with $1.05 billion in cash and cash equivalents and no long-term debt as of December 31, 2017, providing flexibility for operations and strategic investments.
  • 5The company actively returned capital to shareholders through dividends and significant share repurchases, totaling $150.5 million in dividends and $478.3 million in share repurchases during 2017.
  • 6Expeditors continues to invest in its proprietary technology platform, viewing it as a key competitive advantage for enhancing efficiency, visibility, and customer service.
  • 7The company's strategy focuses on organic growth and leveraging its global network, with specific initiatives to strengthen its position in China and North America.

Frequently Asked Questions

Expeditors International operates as a third-party logistics provider. They do not own aircraft or ships but purchase cargo space from carriers (like airlines and ocean shipping lines) on a volume basis and resell it to customers. They offer a broad range of services including airfreight consolidation and forwarding, ocean freight consolidation and forwarding, customs brokerage, warehousing, and distribution.

Expeditors generates revenue from airfreight services, ocean freight and ocean services, and customs brokerage and other services. 'Net revenue' is a non-GAAP measure calculated as total revenues less directly related operating expenses. For freight consolidation services, it primarily represents the difference between the rates charged to customers (sell rates) and the rates paid to carriers (buy rates), plus ancillary fees. This metric is used to demonstrate the company's ability to manage sell rates against its purchasing power.

Key risks for Expeditors include fluctuations in international trade due to economic and political factors, reliance on third-party service providers (carriers) whose financial stability can impact operations, cybersecurity threats disrupting global systems, and navigating complex and evolving international regulations. Competition is also intense, with both niche players and larger entities vying for market share.

Expeditors operates through a network of 177 district offices across five geographic areas. Their strategy emphasizes organic growth by focusing on specific markets and customers. They leverage their integrated, proprietary technology platform and a global network of employees. Key strategic initiatives include aligning growth with market rates, strengthening their import presence in China, and expanding market share in North America.