Summary
Expeditors International of Washington, Inc. (EXPD) reported a decrease in net earnings for the first quarter of 2012 compared to the prior year, driven primarily by a decline in airfreight volumes and net revenues. While ocean freight and customs brokerage services showed some growth, the overall revenue declined. The company's financial position remains strong with substantial cash and cash equivalents and no long-term debt. However, investors should be aware of ongoing government investigations and a recent fine from the European Commission, which could materially impact future results.
Financial Highlights
44 data pointsBeta
Financial Statements
Beta
| Revenue | $1.41B |
| Gross Profit | $446.57M |
| Operating Expenses | $1.29B |
| Operating Income | $125.27M |
| Interest Expense | $620K |
| Net Income | $76.71M |
| EPS (Basic) | $0.36 |
| EPS (Diluted) | $0.36 |
| Shares Outstanding (Basic) | 212.10M |
| Shares Outstanding (Diluted) | 214.20M |
Key Highlights
- 1Total revenues for Q1 2012 decreased by approximately 3.4% to $1.411 billion compared to $1.461 billion in Q1 2011.
- 2Net earnings attributable to shareholders declined by 16.0% to $76.7 million in Q1 2012, down from $91.2 million in Q1 2011.
- 3Diluted earnings per share decreased to $0.36 from $0.42 year-over-year.
- 4Airfreight services net revenue decreased by 10% due to a 9% drop in tonnage, influenced by a general market slowdown and fewer project-related shipments.
- 5Ocean freight and ocean services net revenue saw a modest increase of 2%, with a 6% decrease in ocean freight consolidation net revenue offset by growth in direct ocean freight forwarding and order management.
- 6Customs brokerage and other services net revenue increased by 5%, indicating growth in this segment.
- 7The company maintained a strong liquidity position with $1.41 billion in cash and cash equivalents and no long-term debt.
- 8Expeditors incurred a €4.14 million ($5.5 million) fine from the European Commission related to anti-competitive behavior, recorded in March 2012.
Frequently Asked Questions
The primary reason for the decline in net earnings for the first quarter of 2012 is the decrease in airfreight services revenue, which fell by 10% year-over-year. This decline was mainly attributed to a 9% decrease in airfreight tonnage, stemming from a slower global airfreight market and a reduction in project-related shipments compared to the previous year.
Expeditors maintains a strong liquidity position with $1.41 billion in cash and cash equivalents and short-term investments as of March 31, 2012. The company has no long-term debt. Net cash provided by operating activities was $147.4 million for the quarter, which management believes is sufficient to meet its capital and liquidity requirements.
Expeditors is subject to ongoing government investigations, including one from the U.S. Department of Justice concerning alleged anti-competitive behavior among air cargo freight forwarders and another related to the export of U.S.-origin goods to an embargoed country. Additionally, the European Commission fined the company €4.14 million ($5.5 million) for anti-competitive behavior related to peak season surcharges. While the company is cooperating with authorities, these matters could result in material fines or penalties.
While airfreight remains the largest revenue segment, its share decreased from 39% to 35% of net revenues year-over-year. Conversely, the share of customs brokerage and other services increased from 39% to 42% of net revenues, indicating a slight shift towards these services.