10-QPeriod: Q1 FY2014

EXPEDITORS INTERNATIONAL OF WASHINGTON INC Quarterly Report for Q1 Ended Mar 31, 2014

Filed May 8, 2014For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) reported a solid first quarter for 2014, demonstrating growth in key areas despite ongoing competitive pressures. Total revenues increased by 5.6% year-over-year to $1.49 billion, driven primarily by strong performance in airfreight and customs brokerage services. Net revenues, a key performance indicator for the company, grew by 3.7% to $464.6 million, indicating effective management of pricing and carrier costs. Profitability saw a healthy increase, with net earnings attributable to shareholders rising 4.4% to $83.8 million. Earnings per share also improved to $0.42 on a diluted basis, up from $0.39 in the prior year's first quarter. The company maintained a strong balance sheet with significant cash and cash equivalents, and notably, no long-term debt, providing financial flexibility. Expediters' focus on organic growth and its unique culture of superior customer service continue to underpin its financial performance.

Financial Highlights

42 data points
Beta

Revenue

$1.49B

Net Income

$83.82M

5.6% Net Margin

EPS (Diluted)

$0.42

Total Assets

$2.93B

Cash & Equivalents

$1.13B

Free Cash Flow

$173.86M

Financial Statements
Beta
Revenue$1.49B
Operating Expenses$1.36B
Operating Income$135.20M
Net Income$83.82M
EPS (Basic)$0.42
EPS (Diluted)$0.42
Shares Outstanding (Basic)201.12M
Shares Outstanding (Diluted)201.84M

Key Highlights

  • 1Total revenues increased 5.6% to $1.49 billion, and net revenues grew 3.7% to $464.6 million, demonstrating top-line growth.
  • 2Net earnings attributable to shareholders rose 4.4% to $83.8 million, translating to a 7.7% increase in diluted EPS to $0.42.
  • 3Airfreight services net revenues increased 6%, driven by a 6% rise in tonnage, with notable growth in North America and Europe.
  • 4Ocean freight and ocean services net revenues saw a modest 1% increase, despite a 12% jump in container volume, impacted by reduced sell rates.
  • 5Customs brokerage and other services net revenues increased 3%, primarily due to higher volumes from existing and new customers in North America.
  • 6The company maintained a strong liquidity position with $1.22 billion in cash, cash equivalents, and short-term investments, and no long-term debt.
  • 7Significant share repurchases were executed during the quarter, with over 5.7 million shares bought back, underscoring a commitment to returning capital to shareholders.

Frequently Asked Questions

Total revenues increased by 5.6% to $1.49 billion in the first quarter of 2014 compared to the same period in 2013. Net revenues, a key measure of operational profitability, grew by 3.7% to $464.6 million, indicating the company's ability to manage its costs effectively relative to its pricing.

Expeditors maintains a very strong financial position. As of March 31, 2014, the company had $1.22 billion in cash, cash equivalents, and short-term investments. Importantly, Expediters had no long-term debt, providing significant financial flexibility and reducing financial risk.

Growth was driven by multiple segments. Airfreight services saw a 6% increase in net revenues, largely due to a 6% rise in tonnage, with strong performance in North America and Europe. Customs brokerage and other services also contributed with a 3% increase in net revenues, driven by higher volumes. Ocean freight services showed a 1% increase in net revenue, despite a significant 12% rise in volume, which was impacted by lower sell rates.

Expeditors actively repurchased shares during the quarter. Over 5.7 million shares were repurchased under both its non-discretionary and discretionary stock repurchase plans. This reflects a commitment to managing share count and potentially returning value to shareholders.