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Expeditors International (EXPD) Up 2.2% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Expeditors International (EXPD - Free Report) . Shares have added about 2.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Expeditors International 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.

Second-Quarter Results

The company’s earnings of 79 cents per share, surpassed the Zacks Consensus Estimate by a penny. Also, the bottom line increased more than 31% on a year-over-year basis. Results were aided by higher revenues.

Revenues came in at $1,957.6 million outpacing the Zacks Consensus Estimate of $1,947.6 million. The top line improved 17% 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 4% and 1%, respectively, on a year-over-year basis.

Gross profit (net revenues) increased 14% year over year in the second quarter of 2018 to $642.55 million. Gross margin (yield) came in at 32.8% compared with 33.7% in the year-ago quarter.

In the second quarter, the company repurchased 3.1 million shares at an average price of $76.22 per share. The company exited the quarter with cash and cash equivalents of $1.02 billion compared with $1.05 billion at the end of 2017.

Segmental Revenues

Airfreight Services revenues improved 19.3% year over year to $801.76 million in the second quarter. Ocean Freight and Ocean Services revenues increased marginally to $530 million. Customs Brokerage and Other Services revenues increased 32.63 % year over year to approximately $625.79 million.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Expeditors International has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Expeditors International has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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