10-QPeriod: Q1 FY2009

EXPEDITORS INTERNATIONAL OF WASHINGTON INC Quarterly Report for Q1 Ended Mar 31, 2009

Filed May 8, 2009For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) reported its first quarter 2009 results, reflecting the impact of the global economic downturn. Total revenues decreased significantly to $912.7 million from $1.31 billion in the prior year's quarter, primarily driven by lower volumes in airfreight and ocean freight services. Despite the revenue decline, the company managed its expenses effectively, with operating income decreasing at a slower pace to $91.5 million from $105.6 million. Net earnings attributable to shareholders were $59.3 million, or $0.27 per diluted share, compared to $66.5 million, or $0.30 per diluted share, in the first quarter of 2008. The company maintained a strong liquidity position, with significant cash and cash equivalents and no long-term debt.

Financial Highlights

25 data points
Beta

Revenue

$912.68M

36.9% Gross Margin

Net Income

$59.26M

6.5% Net Margin

EPS (Diluted)

$0.27

Cash & Equivalents

$883.68M

Free Cash Flow

$172.28M

Financial Statements
Beta
Revenue$912.68M
Gross Profit$336.51M
Operating Expenses$821.21M
Operating Income$91.47M
Interest Expense$15K
Net Income$59.26M
EPS (Basic)$0.28
EPS (Diluted)$0.27
Shares Outstanding (Basic)212.10M
Shares Outstanding (Diluted)216.32M

Key Highlights

  • 1Total revenues declined 30% year-over-year to $912.7 million due to the global economic downturn impacting freight volumes.
  • 2Operating income decreased 13% to $91.5 million, demonstrating effective cost management.
  • 3Net earnings attributable to shareholders were $59.3 million, resulting in diluted earnings per share of $0.27, down from $0.30 in the prior year.
  • 4Airfreight services net revenues saw an 11% decrease, driven by a 29% decline in tonnage, though net revenue per kilo increased.
  • 5Ocean freight and ocean services net revenues decreased 7%, with a 20% drop in volume for ocean freight consolidation.
  • 6Customs brokerage and other services net revenues declined 12%, primarily linked to lower overall freight volumes.
  • 7The company ended the quarter with a strong balance sheet, featuring $883.7 million in cash and cash equivalents and no long-term debt, highlighting financial resilience.
  • 8The company is facing ongoing investigations by the U.S. Department of Justice and the European Commission regarding alleged anti-competitive behavior in the air cargo freight forwarding industry, with potential for material financial impact.

Frequently Asked Questions

The primary driver of the revenue decline was the global economic downturn, which significantly reduced freight volumes, particularly in airfreight and ocean freight services.

Expeditors managed expenses effectively by reducing salaries and related costs, which decreased by 9% due to lower bonuses and reduced stock compensation expense. Other overhead expenses also saw an 8% decrease through cost-saving measures.

The company maintains a strong liquidity position, ending the quarter with $883.7 million in cash and cash equivalents and short-term investments. Notably, Expeditors had no long-term debt as of March 31, 2009, indicating a sound financial footing.

Yes, Expeditors is involved in ongoing investigations by the U.S. Department of Justice and the European Commission concerning alleged anti-competitive practices in air cargo freight forwarding. The company has incurred significant legal costs, and there is a risk of potential fines and penalties that could materially impact its financial results.