Expeditors Accelerates as Airfreight Pricing Lifts Profit
Diluted earnings increased 51% to $2.03 a share in the second quarter.
Expeditors International of Washington (EXPD), the global logistics company, reported a 32% increase in second-quarter revenue as elevated airfreight rates amplified stronger shipping volumes.
The quarter marked an acceleration from the start of the year. Revenue had grown 4% in the first quarter, while airfreight tonnage growth strengthened and ocean container volume stabilized after two consecutive quarterly declines.
Revenue reached $3.50 billion, up about 26% sequentially. Diluted earnings rose 51% from a year earlier to $2.03 a share, compared with 16% growth in the first quarter, while net earnings attributable to shareholders increased 45% to $266.2 million.
Operating income rose 41% to $349.6 million despite a restructuring charge, accelerating from 11% growth in the first quarter. Operating efficiency improved to 32.2% from about 30.3% sequentially.
Airfreight revenue jumped 57% to $1.49 billion as tonnage increased 14% and buy and sell rates remained elevated. Tonnage rose 16% from the first quarter, with year-over-year growth strengthening from 13% in April to 15% in June.
Ocean revenue increased 5% to $710.9 million as container volume held flat from a year earlier and rose 7% sequentially. Monthly volume improved from a 9% decline in April to 9% growth in June, while profitability per container strengthened from the first quarter as demand and late-quarter pricing improved.
Customs brokerage and other-services revenue rose 27% to $1.30 billion, supported by double-digit growth across Customs, Transcon, Distribution and Order Management and a temporary increase in IEEPA-related filings. South Asia led the major geographies, with revenue up 58% and operating income nearly doubling.
Expeditors recorded a $25 million pretax restructuring charge for its Global Technology team, partly offset by a $16 million property-sale gain. The changes are expected to reduce annual costs by about $50 million, with most related headcount reductions taking effect in the third quarter.