It has been about a month since the last earnings report for Expeditors International (EXPD). Shares have lost about 1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Expeditors International due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Expeditors' Q4 Earnings & Revenues Beat Estimates
The company’s earnings of $1.02 per share, surpassed the Zacks Consensus Estimate by 17 cents. Also, the bottom line increased on a year-over-year basis. Results were aided by higher revenues and a lower effective tax rate.
Revenues came in at $2,235.6 million outpacing the Zacks Consensus Estimate of $2,126.5 million. The top line improved 18% from the year-ago figure.
Growth was witnessed across all major divisions of the company. Volumes with respect to airfreight tonnage and ocean container increased 2% and 10%, respectively, on a year-over-year basis.
Gross profit (net revenues) increased 8% year over year in the fourth quarter of 2018 to $681 million. Gross margin (yield) came in at 30.4% compared with 33.1% in the year-ago quarter.
In the fourth quarter, the company repurchased 1.3 million shares at an average price of $71.82 per share. The company exited the year with cash and cash equivalents of $923.74 million compared with $1.05 billion at the end of 2017.
Segmental Revenues
Airfreight Services revenues improved 6% year over year to $905.6 million in the fourth quarter. Ocean Freight and Ocean Services revenues increased 18% to $615 million. Customs Brokerage and Other Services revenues increased 36 % year over year to approximately $714.9 million.
Annual Results
For full-year 2018, the carrier’s earnings climbed 29% to $3.48 per share. Revenues increased 18% to $8.14 billion. Effective tax rate was 24.3%, well below the 2017 figure of 31.8%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 7.09% due to these changes.
VGM Scores
At this time, Expeditors International has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Expeditors International has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report
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