The global third-party logistics provider continued to benefit from a lower effective tax rate and higher air and ocean freight volumes.
Expeditors International of Washington Inc. turned in another strong quarterly result for the second quarter of 2018, with net earnings surging 29 percent to $140.6 million compared with the same 2017 period following a 45.6 percent year-over-year jump in Q1, according to the company’s latest financial statements.
The Seattle-based global third-party logistics provider posted diluted earnings per share of $0.79 compared with $0.60 per share a year ago, narrowly beating the consensus Zacks Investment Research estimate of $0.78 per share.
Revenues, up 17 percent year-over-year to $1.96 billion, also came in just ahead of the Zacks forecast of $1.95 billion.
Expeditors attributed the earnings and revenue growth primarily to continued benefits from a lower effective federal tax rate in the United States and higher air and ocean freight volumes.
The company’s effective tax rate for the quarter was 25.8 percent, down from 37.4 percent in the same three-month period last year, according to Bradley Powell, Expeditors’ senior vice president and chief financial officer.
Going forward, he said that as a result of the 2017 Tax and Jobs Act, Expeditors’ effective tax rate largely will depend on the mix of pretax earnings that are generated in its U.S. and foreign operations, as well as further interpretation of and guidance to be issued on the still-relatively new tax law.
Air freight tonnage handled by Expeditors grew 4 percent year-over-year in the second quarter, while ocean container growth was more muted, with volumes climbing 1 percent from Q2 2017.
“We continued to add profitable growth from new and existing customers during the quarter, particularly in air and some of our differentiated, best-in-class services, such as brokerage, Transcon, and order management,” Jeffrey S. Musser, president and chief executive officer, said of the results. “Similar to the first quarter of this year, we remained disciplined on pricing in this strong economy. We experienced strong performance in our ocean forwarding and order management businesses, but ocean freight net revenues were down 5 percent on a 1 percent increase in volumes, as carriers took steps to mitigate the impact of volatile pricing, excess capacity, and higher fuel costs.
“We are continuing to invest in people and assets in the development and support of profitable revenue growth, most notably during Q2 in Europe and North America,” he added. “While we have yet to see changes to supply chains as a result of possible trade wars, we are confident in the capabilities of our people throughout our global network to help our customers navigate the potential impact of new tariffs.”
Expeditors’ earnings keep climbing
