10-QPeriod: Q3 FY2017

EXPEDITORS INTERNATIONAL OF WASHINGTON INC Quarterly Report for Q3 Ended Sep 30, 2017

Filed November 7, 2017For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) reported solid financial results for the nine months ended September 30, 2017, showcasing revenue growth across its key service segments. Total revenues reached $5.02 billion, an increase of 12.7% compared to the same period in the prior year. This growth was driven by strong performance in Airfreight services, which saw a 15% revenue increase, and Ocean freight services, up 12%. Customs brokerage and other services also contributed positively with a 10% revenue rise. Net earnings attributable to shareholders for the nine months were $322.4 million, a slight increase from $320.2 million in the prior year, resulting in diluted earnings per share of $1.77. The company continued its focus on operational efficiency, with overhead expenses growing at a slower pace than net revenues. Notably, EXPD's balance sheet remains strong, with total assets increasing to $3.07 billion and shareholders' equity growing to $1.98 billion, supported by robust operating cash flow and a significant cash balance of $1.03 billion.

Financial Highlights

42 data points
Beta

Revenue

$1.80B

Net Income

$120.26M

6.7% Net Margin

EPS (Diluted)

$0.66

Total Assets

$3.07B

Cash & Equivalents

$1.03B

Free Cash Flow

$85.36M

Financial Statements
Beta
Revenue$1.80B
Operating Expenses$1.62B
Operating Income$186.90M
Net Income$120.26M
EPS (Basic)$0.67
EPS (Diluted)$0.66
Shares Outstanding (Basic)179.42M
Shares Outstanding (Diluted)181.79M

Key Highlights

  • 1Total revenues increased by 12.7% to $5.02 billion for the nine months ended September 30, 2017, compared to the prior year.
  • 2Airfreight services revenue grew by 15% to $2.02 billion, and Ocean freight services revenue increased by 12% to $1.59 billion for the nine-month period.
  • 3Net earnings attributable to shareholders for the nine months were $322.4 million, a modest increase from $320.2 million in the prior year.
  • 4Diluted earnings per share for the nine-month period were $1.77, up from $1.75 in the prior year.
  • 5The company maintained a strong liquidity position with cash and cash equivalents of $1.03 billion at September 30, 2017.
  • 6Expeditors continued its share repurchase program, with 6.1 million shares repurchased in the first nine months of 2017.
  • 7Identifiable assets grew to $3.07 billion, reflecting the company's expanded operations.

Frequently Asked Questions

Expeditors reported a significant increase in total revenues, growing by 12.7% to $5.02 billion for the nine months ended September 30, 2017, compared to $4.46 billion in the same period of 2016. This growth was primarily fueled by strong performance in Airfreight services (up 15%) and Ocean freight services (up 12%).

Net earnings attributable to shareholders saw a slight increase, reaching $322.4 million for the nine months ended September 30, 2017, compared to $320.2 million in the prior year. Diluted earnings per share also improved marginally to $1.77 from $1.75. This suggests a stable, albeit modestly growing, profitability trend.

Expeditors maintained a strong financial position with $1.03 billion in cash and cash equivalents as of September 30, 2017. Net cash from operating activities remained substantial, although it decreased compared to the prior year, largely due to increases in accounts receivable from higher revenues. The company also actively engaged in share repurchases, utilizing its strong cash flow.

Expeditors is preparing for the adoption of new revenue recognition standards (effective January 1, 2018) and lease accounting standards (effective January 1, 2019). While the company anticipates changes in revenue recognition, particularly deferring more revenue and potentially shifting from net to gross reporting for some services, it does not currently expect a material impact on its overall financial results upon implementation.