Summary
Expeditors International of Washington, Inc. (EXPD) reported its third-quarter and nine-month results for the period ending September 30, 2009. The company experienced a significant downturn in revenues across all its major service lines—airfreight, ocean freight, and customs brokerage—primarily due to the global economic recession that began in the latter half of 2008. Total revenues for the nine months decreased from $4.3 billion in 2008 to $2.8 billion in 2009, reflecting this challenging economic environment. Despite the revenue decline, the company maintained a strong focus on operational efficiency, with salaries and related costs decreasing. However, operating income and net earnings saw a corresponding decline compared to the prior year. The company also highlighted ongoing legal and regulatory investigations, which continue to incur costs and present potential future risks. Financially, EXPD maintained a healthy liquidity position with substantial cash and cash equivalents and no long-term debt. The company continued its share repurchase program and declared a semi-annual dividend, signaling a commitment to shareholder returns despite the economic headwinds. Management emphasized its core strategy of organic growth, employee development, and a strong corporate culture as key differentiators in the competitive logistics market. Investors should note the continued impact of the global economic downturn on freight volumes and pricing pressures, as well as the potential financial impact of ongoing legal proceedings.
Financial Highlights
48 data points| Revenue | $1.04B |
| Gross Profit | $346.51M |
| Operating Expenses | $941.08M |
| Operating Income | $96.25M |
| Interest Expense | $325K |
| Net Income | $57.75M |
| EPS (Basic) | $0.27 |
| EPS (Diluted) | $0.27 |
| Shares Outstanding (Basic) | 212.24M |
| Shares Outstanding (Diluted) | 216.68M |
Key Highlights
- 1Total revenues for the nine months ended September 30, 2009, significantly decreased by 34% to $2.85 billion compared to $4.33 billion in the same period of 2008, driven by the global economic downturn.
- 2Net earnings attributable to shareholders for the nine months decreased by 23.4% to $171.1 million from $223.3 million in the prior year.
- 3Operating income for the nine months declined by 22.4% to $274.6 million compared to $353.9 million in 2008, reflecting reduced business volumes and pricing pressures.
- 4The company experienced a decrease in tonnage for airfreight services and container volume for ocean freight services, directly attributable to the economic recession.
- 5Salaries and related costs decreased by 12% for the nine-month period, reflecting workforce adjustments and lower bonus accruals, contributing to cost management efforts.
- 6Expeditors maintained a strong balance sheet with no long-term debt and ended the period with $947.3 million in cash and cash equivalents, demonstrating robust liquidity.
- 7The company continues to face significant legal and regulatory scrutiny, with ongoing investigations from the DOJ and the European Commission, and a class-action lawsuit, which have incurred substantial legal costs and present potential future financial risks.