Expeditors International of Washington, Inc. (NYSE:EXPD) today
announced second quarter 2024 financial results including the
following comparisons to the same quarter of 2023:
- Diluted Net Earnings Attributable to Shareholders per share
(EPS1) decreased 5% to $1.24
- Net Earnings Attributable to Shareholders decreased 11% to $175
million
- Operating Income decreased 10% to $224 million
- Revenues increased 9% to $2.4 billion
- Airfreight tonnage volume increased 15% and ocean container
volume decreased 3%
"We continued to adapt well to another erratic quarter for our
industry, which has been impacted by the rapid changes and
imbalances in buy versus sell rates, particularly on exports out of
Asia,” said Jeffrey S. Musser, President and Chief Executive
Officer. “Air market capacity has been constrained by e-commerce
demand, and ocean routing has been significantly disrupted by
geopolitical events in the Red Sea, causing less frequent services
due to blank sailings, longer transit times as well as port
congestion. We have continued to adjust to the disruptions and
uneven demand, keeping costs in check while we work to bring
efficiency back in line with historical expectations.
“Air tonnage improved 15% year-over-year and 10% sequentially
against Q1 2024, but buy rates outpaced increased sell rates, as
international direct e-commerce demand from North Asia outweighed
increased carrier capacity to accommodate this growth in demand.
The air markets have further been impacted by manufacturing
relocations. With respect to the ocean market, longer sailings due
to insecurity on the Red Sea have largely lessened the benefits of
any increased ocean capacity brought on this quarter. Even though
ocean volumes increased for a second sequential quarter, buy rate
increases outpaced higher sell rates.
“As we noted in the first quarter, our ability to see much
beyond our day-to-day levels of activity remains challenging. While
there are some signs of improving market conditions, there is much
uncertainty with regard to demand, capacity, and pricing, not to
mention unpredictable events with the potential to impact global
shipping for days, weeks, or even longer. I am grateful for the
customer-focused dedication of our workforce, particularly during
these unpredictable times. We remain focused on keeping costs in
check and are ready to pivot for whatever new challenges
arise.”
Bradley S. Powell, Senior Vice President and Chief Financial
Officer, added, “Expenses are still high compared to our 30%
efficiency target (operating income as a percentage of revenue less
directly related cost of transportation and other expenses), with
compensation being our largest and most variable operating expense.
We continue to focus on alignment of shipment activity with
headcount. Once again, our primary area of increased headcount
during the quarter compared to the same quarter last year was in
information systems, as we add critical enhancements to further
bolster our technology solutions, network and security. As we drive
to achieve our efficiency target, we will continue to make
important investments in people, processes and technology, as well
as to invest in our strategic efforts to explore new areas for
profitable growth.”
Mr. Powell also noted that the Company returned $205 million to
shareholders in common stock repurchases and dividends during the
second quarter of 2024.
Expeditors is a global logistics company headquartered in
Seattle, Washington. The Company employs trained professionals in
176 district offices and numerous branch locations located on six
continents linked into a seamless worldwide network through an
integrated information management system. Services include the
consolidation or forwarding of air and ocean freight, customs
brokerage, vendor consolidation, cargo insurance, time-definite
transportation, order management, warehousing and distribution and
customized logistics solutions.
_______________________ 1Diluted earnings attributable to
shareholders per share. NOTE: See Disclaimer on Forward-Looking
Statements in this release.
Disclaimer on Forward-Looking
Statements:
Certain statements contained in this news release are
“forward-looking statements,” based on management’s views with
respect to future events and underlying assumptions that involve
risks and uncertainties. These forward-looking statements include
statements regarding inflation; fragile economies; continued growth
in air and ocean carrier capacity and the impact on rates;
unpredictability in the ocean and air markets, including
uncertainty due to conflicts in the Middle East and Red Sea; new
capacity in the marketplace; longer ocean transit times; strong
e-commerce demand in the air market; and cautious shipper demand
and variable rate stability. Future financial performance could
differ materially because of factors such as: our ability to keep
headcount and other costs in check while continuing to drive
efficiency back towards our historical expectations; the alignment
of our variable compensation structure with performance; our
ability to enhance and bolster our network security; that
management is able to grow the business and explore new areas for
profitable growth; our ability to leverage the strength of our
carrier relationships; the strength of our non-asset-based
operating model; and our ability to remain a strong, healthy,
unified and resilient organization. The normalizing of the supply
chain at the end of the pandemic, along with geo-political risks
and the current uncertainty in the global economy, could have the
effect of heightening many of the other risks described in Item 1A
of our Annual Report on Form 10-K, including, without limitation,
those related to the success of our strategy and desire to maintain
historical unitary profitability, our ability to attract and retain
customers, our ability to manage costs, interruptions to our
information technology systems, the ability of third-party
providers to perform and potential litigation and contingencies,
including risks associated with tax audits, as updated by our
reports on Form 10-Q, filed with the Securities and Exchange
Commission. These and other factors are discussed in the Company’s
regulatory filings with the Securities and Exchange Commission,
including those in “Item 1A. Risk Factors” of the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2023,
and the Company’s most recent Form 10-Q. The forward-looking
statements contained in this news release speak only as of this
date and the Company does not assume any obligation to update them
except as required by law.
Expeditors International of Washington,
Inc.
Second Quarter 2024 Earnings Release,
August 6, 2024
Financial Summary for the three months
ended June 30, 2024 and 2023 (Unaudited)
(in 000's of US dollars except share
data)
Three months ended June
30,
Six months ended June
30,
2024
2023
% Change
2024
2023
% Change
Revenues
$
2,439,001
$
2,239,752
9
%
$
4,645,679
$
4,832,341
(4
)%
Directly related cost of transportation
and other expenses 1
$
1,639,408
$
1,419,183
16
%
$
3,072,688
$
3,138,285
(2
)%
Salaries and other operating
expenses 2
$
575,674
$
572,072
1
%
$
1,134,296
$
1,169,590
(3
)%
Operating income
$
223,919
$
248,497
(10
)%
$
438,695
$
524,466
(16
)%
Net earnings attributable to
shareholders
$
175,469
$
196,800
(11
)%
$
344,621
$
422,811
(18
)%
Diluted earnings attributable to
shareholders per share
$
1.24
$
1.30
(5
)%
$
2.41
$
2.75
(12
)%
Basic earnings attributable to
shareholders per share
$
1.24
$
1.31
(5
)%
$
2.43
$
2.78
(13
)%
Diluted weighted average shares
outstanding
141,716
151,563
142,928
153,516
Basic weighted average shares
outstanding
141,013
150,435
142,104
152,291
1Directly related cost of transportation and other expenses
totals Operating Expenses from Airfreight services, Ocean freight
and ocean services and Customs brokerage and other services as
shown in the Condensed Consolidated Statements of Earnings.
2Salaries and other operating expenses totals Salaries and
related, Rent and occupancy, Depreciation and amortization, Selling
and promotion and Other as shown in the Condensed Consolidated
Statements of Earnings.
During the three and six months ended June 30, 2024, we
repurchased 0.9 million and 3.9 million shares of common stock at
an average price of $116.88 and $119.43 per share. During the three
and six months ended June 30, 2023 we repurchased 6.0 million and
8.0 million shares of common stock at an average price of $114.61
and $113.23 per share.
Employee Full-time Equivalents
as of
June 30, 2024
June 30, 2023
North America
6,847
7,154
Europe
3,812
3,946
North Asia
2,238
2,340
South Asia
1,717
1,731
Middle East, Africa and India
1,391
1,459
Latin America
754
765
Information Systems
1,291
1,247
Corporate
413
411
Total
18,463
19,053
Second quarter year-over-year
percentage increase (decrease) in:
2024
Airfreight kilos
Ocean freight FEU
April
13
%
(3
)%
May
15
%
(3
)%
June
19
%
(2
)%
Quarter
15
%
(3
)%
Investors may submit written questions via e-mail to:
investor@expeditors.com. Questions received by the end of business
on August 9, 2024 will be considered in management's 8-K “Responses
to Selected Questions.”
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(In thousands, except per share
data)
(Unaudited)
June 30, 2024
December 31, 2023
Assets:
Current Assets:
Cash and cash equivalents
$
1,271,853
$
1,512,883
Accounts receivable, less allowance for
credit loss of $6,966 at June 30, 2024 and $6,550 at December 31,
2023
1,843,894
1,532,599
Deferred contract costs
395,241
218,807
Other
185,766
170,907
Total current assets
3,696,754
3,435,196
Property and equipment, less accumulated
depreciation and amortization $608,860 at June 30, 2024 and
$597,473 at December 31, 2023
461,494
479,225
Operating lease right-of-use assets
537,114
516,280
Goodwill
7,927
7,927
Deferred federal and state income taxes,
net
69,646
63,690
Other assets, net
15,406
21,491
Total assets
$
4,788,341
$
4,523,809
Liabilities:
Current Liabilities:
Accounts payable
$
1,073,476
$
860,856
Accrued liabilities, primarily salaries
and related costs
486,989
447,336
Contract liabilities
474,507
280,909
Current portion of operating lease
liabilities
104,042
99,749
Federal, state and foreign income
taxes
21,904
15,562
Total current liabilities
2,160,918
1,704,412
Noncurrent portion of operating lease
liabilities
448,996
427,984
Shareholders’ Equity:
Preferred stock, none issued
—
—
Common stock, par value $0.01 per share.
Issued and outstanding: 140,633 shares at June 30, 2024 and 143,866
shares at December 31, 2023
1,406
1,439
Additional paid-in capital
7,732
—
Retained earnings
2,385,740
2,580,968
Accumulated other comprehensive loss
(218,457
)
(192,057
)
Total shareholders’ equity
2,176,421
2,390,350
Noncontrolling interest
2,006
1,063
Total equity
2,178,427
2,391,413
Total liabilities and equity
$
4,788,341
$
4,523,809
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements
of Earnings
(In thousands, except per share
data)
(Unaudited)
Three months ended June
30,
Six months ended June
30,
2024
2023
2024
2023
Revenues:
Airfreight services
$
860,323
$
751,171
$
1,619,697
$
1,656,074
Ocean freight and ocean services
651,675
593,801
1,222,461
1,291,108
Customs brokerage and other services
927,003
894,780
1,803,521
1,885,159
Total revenues
2,439,001
2,239,752
4,645,679
4,832,341
Operating Expenses:
Airfreight services
645,168
525,027
1,182,759
1,191,049
Ocean freight and ocean services
478,121
405,807
892,104
889,489
Customs brokerage and other services
516,119
488,349
997,825
1,057,747
Salaries and related
426,431
428,558
839,593
878,406
Rent and occupancy
59,597
58,205
120,849
115,837
Depreciation and amortization
14,979
15,506
30,140
30,767
Selling and promotion
7,998
6,314
14,777
12,698
Other
66,669
63,489
128,937
131,882
Total operating expenses
2,215,082
1,991,255
4,206,984
4,307,875
Operating income
223,919
248,497
438,695
524,466
Other Income (Expense):
Interest income
11,904
17,792
26,782
36,567
Other, net
98
(106
)
3,626
5,728
Other income, net
12,002
17,686
30,408
42,295
Earnings before income taxes
235,921
266,183
469,103
566,761
Income tax expense
60,770
70,390
123,552
144,970
Net earnings
175,151
195,793
345,551
421,791
Less net earnings (losses) attributable to
the noncontrolling interest
(318
)
(1,007
)
930
(1,020
)
Net earnings attributable to
shareholders
$
175,469
$
196,800
$
344,621
$
422,811
Diluted earnings attributable to
shareholders per share
$
1.24
$
1.30
$
2.41
$
2.75
Basic earnings attributable to
shareholders per share
$
1.24
$
1.31
$
2.43
$
2.78
Weighted average diluted shares
outstanding
141,716
151,563
142,928
153,516
Weighted average basic shares
outstanding
141,013
150,435
142,104
152,291
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements
of Cash Flows
(In thousands)
(Unaudited)
Three months ended June
30,
Six months ended June
30,
2024
2023
2024
2023
Operating Activities:
Net earnings
$
175,151
$
195,793
$
345,551
$
421,791
Adjustments to reconcile net earnings to
net cash from operating activities:
Provisions for losses (recoveries) on
accounts receivable
1,644
(167
)
2,038
905
Deferred income tax benefit
(6,917
)
(3,560
)
(4,623
)
(1,524
)
Stock compensation expense
25,704
18,595
38,076
31,083
Depreciation and amortization
14,979
15,506
30,140
30,767
Other, net
1,885
2,564
3,870
3,723
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable
(286,085
)
174,321
(346,627
)
682,927
Increase (decrease) in accounts payable
and accrued liabilities
211,692
(149,986
)
295,283
(352,909
)
(Decrease) increase in deferred contract
costs
(122,258
)
18,166
(186,320
)
85,787
Increase (decrease) in contract
liabilities
135,067
(23,803
)
204,375
(108,250
)
Decrease in income taxes payable, net
(29,854
)
(93,817
)
(7,168
)
(93,726
)
Increase in other, net
5,761
4,834
9,078
4,284
Net cash from operating activities
126,769
158,446
383,673
704,858
Investing Activities:
Purchase of property and equipment
(7,943
)
(10,481
)
(18,124
)
(20,607
)
Other, net
66
(794
)
163
(219
)
Net cash from investing activities
(7,877
)
(11,275
)
(17,961
)
(20,826
)
Financing Activities:
Proceeds (payments) on borrowings on lines
of credit, net
1,259
1,311
(15,983
)
(13,596
)
Proceeds from issuance of common stock
6,449
9,176
14,478
18,464
Repurchases of common stock
(102,300
)
(687,689
)
(462,824
)
(901,191
)
Dividends paid
(102,638
)
(102,263
)
(102,638
)
(102,263
)
Payments for taxes related to net share
settlement of equity awards
(10,163
)
(12,056
)
(15,348
)
(19,501
)
Net cash from financing activities
(207,393
)
(791,521
)
(582,315
)
(1,018,087
)
Effect of exchange rate changes on cash
and cash equivalents
(10,102
)
(7,857
)
(24,427
)
(1,489
)
Change in cash and cash equivalents
(98,603
)
(652,207
)
(241,030
)
(335,544
)
Cash and cash equivalents at beginning of
period
1,370,456
2,350,794
1,512,883
2,034,131
Cash and cash equivalents at end of
period
$
1,271,853
$
1,698,587
$
1,271,853
$
1,698,587
Taxes Paid:
Income taxes
$
96,739
$
173,670
$
133,603
$
244,456
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC.
AND SUBSIDIARIES
Business Segment Information
(In thousands)
(Unaudited)
UNITED STATES
OTHER NORTH AMERICA
LATIN AMERICA
NORTH ASIA
SOUTH ASIA
EUROPE
MIDDLE EAST, AFRICA AND
INDIA
ELIMI- NATIONS
CONSOLI- DATED
For the three months ended June 30,
2024:
Revenues
$
779,170
110,723
45,314
637,351
287,943
409,455
170,349
(1,304
)
2,439,001
Directly related cost of transportation
and other expenses1
$
423,102
65,374
24,640
512,146
223,238
262,451
128,949
(492
)
1,639,408
Salaries and other operating expenses2
$
263,675
34,339
14,551
70,762
43,084
119,713
30,352
(802
)
575,674
Operating income
$
92,393
11,010
6,123
54,443
21,621
27,291
11,048
(10
)
223,919
Identifiable assets at period end
$
2,566,053
173,764
93,967
626,892
336,598
738,068
284,672
(31,673
)
4,788,341
Capital expenditures
$
2,948
575
129
355
1,955
1,094
887
—
7,943
Equity
$
1,546,936
32,700
41,135
163,913
129,886
151,165
153,155
(40,463
)
2,178,427
For the three months ended June 30,
2023:
Revenues
$
805,948
110,255
49,972
510,027
199,868
440,916
123,972
(1,206
)
2,239,752
Directly related cost of transportation
and other expenses1
$
426,121
69,108
29,428
387,973
134,477
288,808
83,890
(623
)
1,419,182
Salaries and other operating expenses2
$
256,277
34,793
16,265
68,290
44,048
125,196
27,820
(616
)
572,073
Operating income
$
123,550
6,354
4,279
53,764
21,343
26,912
12,262
33
248,497
Identifiable assets at period end
$
2,553,553
192,362
115,458
495,229
213,026
748,449
258,849
(12,886
)
4,564,040
Capital expenditures
$
6,623
161
46
352
168
2,336
795
—
10,481
Equity
$
1,873,220
45,252
59,289
220,638
93,476
146,174
158,133
(38,078
)
2,558,104
UNITED STATES
OTHER NORTH AMERICA
LATIN AMERICA
NORTH ASIA
SOUTH ASIA
EUROPE
MIDDLE EAST, AFRICA AND
INDIA
ELIMI- NATIONS
CONSOLI- DATED
For the six months ended June 30,
2024:
Revenues
$
1,530,713
217,573
89,806
1,182,292
515,662
807,772
304,455
(2,594
)
4,645,679
Directly related cost of transportation
and other expenses1
$
827,051
132,084
49,104
938,620
387,262
516,970
222,741
(1,144
)
3,072,688
Salaries and other operating expenses2
$
519,383
67,423
31,315
138,022
83,996
236,801
58,816
(1,460
)
1,134,296
Operating income
$
184,279
18,066
9,387
105,650
44,404
54,001
22,898
10
438,695
Identifiable assets at period end
$
2,566,053
173,764
93,967
626,892
336,598
738,068
284,672
(31,673
)
4,788,341
Capital expenditures
$
8,476
1,974
282
637
2,099
3,312
1,344
—
18,124
Equity
$
1,546,936
32,700
41,135
163,913
129,886
151,165
153,155
(40,463
)
2,178,427
For the six months ended June 30,
2023:
Revenues
$
1,751,442
220,105
104,667
1,092,448
423,995
975,380
266,675
(2,371
)
4,832,341
Directly related cost of transportation
and other expenses1
$
966,078
138,313
61,730
840,315
292,100
661,068
179,839
(1,159
)
3,138,284
Salaries and other operating expenses2
$
523,960
70,617
35,767
139,430
90,846
252,568
57,652
(1,249
)
1,169,591
Operating income
$
261,404
11,175
7,170
112,703
41,049
61,744
29,184
37
524,466
Identifiable assets at period end
$
2,553,553
192,362
115,458
495,229
213,026
748,449
258,849
(12,886
)
4,564,040
Capital expenditures
$
12,067
630
276
942
335
5,319
1,038
—
20,607
Equity
$
1,873,220
45,252
59,289
220,638
93,476
146,174
158,133
(38,078
)
2,558,104
1Directly related cost of transportation and other expenses
totals Operating Expenses from Airfreight services, Ocean freight
and ocean services and Customs brokerage and other services as
shown in the Condensed Consolidated Statements of Earnings.
2Salaries and other operating expenses totals Salaries and
related, Rent and occupancy, Depreciation and amortization, Selling
and promotion and Other as shown in the Condensed Consolidated
Statements of Earnings.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240805786675/en/
Jeffrey S. Musser President and Chief Executive Officer (206)
674-3433
Bradley S. Powell Senior Vice President and Chief Financial
Officer (206) 674-3412
Geoffrey Buscher Director - Investor Relations (206)
892-4510
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