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Why Is Expeditors International (EXPD) Down 1.9% Since Last Earnings Report?

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It has been about a month since the last earnings report for Expeditors International (EXPD - Free Report) . Shares have lost about 1.9% 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 its most recent earnings report in order to get a better handle on the important drivers.

Earnings Beat at Expeditors in Q2

The company’s earnings of 88 cents per share surpassed the Zacks Consensus Estimate of 80 cents. Moreover, the bottom line increased 11% on a year-over-year basis. This year-over-year improvement was owing to higher revenues and a lower effective tax rate. Effective tax rate declined to 23.6% in the reported quarter from 25.8% a year ago.

Although revenues of $2.04 billion fell short of the Zacks Consensus Estimate of $2.05 billion, the same improved 4% from the year-ago figure. While volumes with respect to airfreight tonnage decreased 5%, ocean container volumes inched up 2% on a year-over-year basis. Results were partly affected by lower air freight revenues.

Gross profit (net revenues) increased 3% year over year to $661.69 million. Gross margin (yield) came in at 32.5% compared with 32.8% in the year-ago quarter.

As of Jun 30, 2019, the company repurchased 3.2 million shares at an average price of $73.47 per share. The company exited the quarter with cash and cash equivalents of $1.08 billion compared with $923.74 million at the end of 2018.

Segmental Revenues

Airfreight Services revenues declined 7.5% year over year to $741.58 million in the second quarter. However, Ocean Freight and Ocean Services revenues increased 2.6% to $543.81 million. Also, Customs Brokerage and Other Services revenues rose 19.9% year over year to approximately $750.19 million.
 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

Currently, Expeditors International has a nice Growth Score of B, however its Momentum Score is doing a bit 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.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. 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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