Expeditors International of Washington (EXPD Quick QuoteEXPD - Free Report) reported third-quarter 2026 earnings of $2.65 per share, up 61.6% year over year and 18.3% above the Zacks Consensus Estimate of $2.24. Revenues increased 41.9% to $4.11 billion, surpassing the consensus mark of $3.63 billion.

Results benefited from robust airfreight demand, stronger ocean freight activity and growth in customs-related businesses. Airfreight tonnage increased 13% year over year, while ocean container volume rose 7%.

EXPD Gains From Airfreight Demand and Higher Rates

Airfreight services revenues jumped 51.4% year over year to $1.54 billion. Demand for air capacity continued to outpace available space, keeping freight rates elevated during the quarter.

Record global air tonnage reflected particularly strong export activity in South Asia. Shipments from artificial intelligence hyperscalers and their infrastructure suppliers supported growth. Limited fleet expansion and delays in aircraft deliveries constrained capacity, while aircraft redeployments affected Asia-Europe e-commerce flows.

Expeditors International of Washington, Inc. Price, Consensus and EPS Surprise

Expeditors International of Washington, Inc. price-consensus-eps-surprise-chart | Expeditors International of Washington, Inc. Quote

Expeditors Sees Ocean Freight Rebound

Ocean freight and ocean services revenues rose 47.8% year over year to $1.10 billion. Container volume returned to growth after remaining flat in the second quarter, with September posting a 12% year-over-year increase.

Three consecutive typhoons disrupted major Asian ports and transshipment hubs, idling capacity and interrupting operations. Expeditors relied on its carrier relationships to secure space and maintain customer service. Management expects congestion and supply chain challenges to persist through the remainder of 2026.

EXPD Benefits From Customs and Distribution Demand

Customs brokerage and other services revenues climbed 29.4% year over year to $1.46 billion. Customs, Transcon, Distribution and Order Management each recorded double-digit revenue growth for the third consecutive quarter.

New business wins, higher customs declaration volumes and demand from existing customers fueled activity across regions. Tariff-related additional-line fees and post-entry work also supported customs brokerage. Road freight and warehousing operations benefited from strong demand among large technology customers.

Expeditors Improves Margins Despite Higher Expenses

Operating income surged 54.6% year over year to $445.4 million. Operating margin expanded to 10.8% from 10% a year earlier, as revenue growth outpaced increases in overhead.

Salaries and other operating expenses increased 15.2% to $768.3 million. Directly related transportation and other expenses advanced 49.2% to $2.89 billion. Despite these increases, operating efficiency reached 36.7%, above management's historical target of 30%, with headcount rising only 1% year over year.

EXPD Posts Growth Across Geographic Markets

U.S. operating income advanced 63.4% year over year to $236.6 million. South Asia operating income increased 74.2% to $57.6 million, underscoring the region's importance to the quarter's freight growth.

North Asia operating income climbed 37% to $77.9 million, while Europe gained 11.0% to $34.6 million. The Middle East, Africa and India region more than doubled operating income to $17.7 million from $8.2 million a year earlier.

Expeditors Invests in Long-Term Productivity

Management highlighted investments in temperature-controlled facilities, critical logistics services and technology initiatives. These projects are intended to support customer demand while improving the productivity of the company's global network.

Artificial intelligence and other technology solutions remain a focus as Expeditors aims to increase revenues without proportionate increases in staffing. Management also described a strong pipeline of new business and emphasized expanding its customer base beyond hyperscalers.

EXPD Generates Cash and Returns Capital to Shareholders

Net cash from operating activities totaled $212.6 million, up 5.6% year over year. Accounts receivable increased amid expanding business activity, partially offset by higher accounts payable, accrued expenses and contract liabilities.

Expeditors, currently carrying a  Zacks Rank #2 (Buy), repurchased 1.1 million shares during the quarter at an average price of $178.36, returning $197.3 million through buybacks. Cash and cash equivalents stood at $1.09 billion at September-end, compared with $1.31 billion at the end of 2025. Total assets reached $5.79 billion, while shareholders' equity totaled $2.34 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Q3 Performance of Other Transportation Companies

Alaska Air Group, Inc. (ALK Quick QuoteALK - Free Report) reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company had reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum.

Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion marginally.

Wabtec Corporation (WAB Quick QuoteWAB - Free Report) reported mixed third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same.

Quarterly earnings (excluding 41 cents from non-recurring items) of $2.83 per share beat the Zacks Consensus Estimate of $2.72 and increased 22% year over year. Revenues climbed 8.1% year over year to $3.12 billion but missed the consensus mark of $3.18 billion. The 12-month backlog increased 8.8% to $8.99 billion.