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Why Is Expeditors (EXPD) Up 9% Since Its Last Earnings Report?

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It has been about a month since the last earnings report for Expeditors International of Washington, Inc. (EXPD - Free Report) . Shares have added about 9% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is EXPD due for a pullback? 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 drivers.

First-Quarter results

The company’s earnings of 76 cents per share, surpassed the Zacks Consensus Estimate of 64 cents. Also, the bottom line increased more than 45% on a year-over-year basis. Results were aided by higher revenues.

Revenues came in at $1,854.3 million outpacing the Zacks Consensus Estimate of $1,702.4 million. The top line improved 20% from the year-ago figure. Growth was witnessed across all major divisions of the company. Volumes with respect to airfreight tonnage and ocean container both increased 5% on a year-over-year basis.

Gross profit (net revenues) increased 21% year over year in the first quarter of 2018 to $635.84 million. Gross margin (yield) came in at 34.3% compared with 34.14% in the year-ago quarter.

In the first quarter, the company repurchased 2.7 million shares at an average price of $64.76 per share. The company exited the quarter with cash and cash equivalents of $1.13 billion compared with $1.05 billion at the end of 2017. As a result of the tax reform, the company’s effective tax rate for the first quarter was 31.3%, compared with 37.3% recorded in the year-ago quarter.

Segmental Revenues

Airfreight Services revenues improved 18.8% year over year to $731.23 million in the first quarter. Ocean Freight and Ocean Services revenues increased 5.5% year over year to $520.88 million. Customs Brokerage and Other Services revenues increased 38.2 % year over year to approximately $602.16 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been five revisions higher for the current quarter. In the past month, the consensus estimate has shifted by 13.8% due to these changes.

Expeditors International of Washington, Inc. Price and Consensus

VGM Scores

At this time, EXPD has an average Growth Score of C, however its Momentum is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.

Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise EXPD has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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