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Expeditors International (EXPD) Down 3.4% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Expeditors International (EXPD - Free Report) . Shares have lost about 3.4% 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 drivers.

Earnings Miss at Expeditors in Q1

The company’s earnings of 80 cents per share fell short of the Zacks Consensus Estimate by 5 cents. However, the bottom line increased on a year-over-year basis. The year over year improvement was owing to higher revenues and a lower effective tax rate. Effective tax rate declined to 28.3% in the reported quarter from 31.1% a year-ago.

Revenues came in at $2.02 billion outpacing the Zacks Consensus Estimate of $1.96 billion. The top line improved 9% from the year-ago figure. Volumes with respect to airfreight tonnage decreased 4% while ocean container volumes increased 6% on a year-over-year basis.

Gross profit (net revenues) increased 3% year over year in the first quarter of 2019 to $654 million. Gross margin (yield) came in at 32.4% compared with 34.3% in the year-ago quarter.

In the first quarter, the company repurchased 0.6 million shares at an average price of $75.4 per share. The company exited the quarter with cash and cash equivalents of $1.19 billion compared with $923.74 million at the end of 2018.

Segmental Revenues

Airfreight Services revenues declined 2.2% year over year to $714.9 million in the first quarter. Ocean Freight and Ocean Services revenues increased 9.2% to $568.64 million. Customs Brokerage and Other Services revenues increased 22.3 % year over year to approximately $736.5 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 strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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 broadly trending downward for the stock, and the magnitude of these revisions 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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