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Expeditors (EXPD) Q3 Earnings: Disappointment in Store?

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Expeditors International of Washington (EXPD - Free Report) is scheduled to report third-quarter results on Nov 8, before the market opens.

The company posted an earnings surprise of 6.78% in the last quarter. In fact, it delivered earnings surprises in three of the last four quarters, with an average beat of 2.47%. 

Factors at Play

Expeditors’ profit is likely to be hurt by lower consumer and business demand. Given that the company generates the bulk of revenues from customers in industries with shipping patterns linked to consumer demand and production schedules, its top-line growth is directly influenced by changes in these factors. Moreover, rate volatility during high demand periods can further affect the top line. The company also faces competition from peers like Matson Inc. (MATX - Free Report) and Student Transport Inc. .

However, the company’s strong balance sheet and its asset light business model raise optimism. We are also impressed with the company’s policy of awarding shareholders through dividends and share buybacks.

Earnings Whispers

Our proven model does not conclusively show that Expeditors is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP:Expeditors has an earnings ESP of -1.54%. This is because the Most Accurate estimate stands at 64 cents while the Zacks Consensus Estimate is pegged at 65 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks Rank: Expeditors has a Zacks Rank #4 (Sell).

Please note that we caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions momentum.

EXPEDITORS INTL Price and EPS Surprise

 

Stock to Consider

Here is a company you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this quarter:

Navios Maritime Holdings Inc. is expected to report third-quarter earnings on Nov 28. The company has an Earnings ESP of +16.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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