Tuesday, logistics company Expeditors International of Washington Inc. (EXPD), reported a lower profit for the third quarter ended September 30, as revenues for the quarter declined 34%, impacted by a drop in freight service yields.
The Seattle, Washington-based company's net earnings attributable to shareholders was $57.75 million or $0.27 per share, down from $85.57 million or $0.39 per share in the same quarter last year. On average, sixteen analysts polled by Thomson Reuters expected the company to report earnings of $0.29 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues dropped 34% to $1.04 billion, compared to $1.56 billion for the same quarter last year. Net revenues declined by 19% year-over-year to $346.51 million from $429.13 million.
Eleven analysts had expected revenue of $1.02 billion for the quarter.
Commenting on the impact of capacity reductions imposed by both air and ocean carriers, Peter Rose, Chairman and Chief Executive Officer said, While we wouldn't call it 'The Perfect Freight Storm,' the rapidity of these carrier moves created a pricing environment that resulted in our experiencing single digit airfreight yields out of Asia during the first several weeks of September. Ocean yields were also significantly impacted. Market conditions required that we absorb these increases for several weeks as we worked with customers to raise rates in a commercially acceptable manner."
Commenting on the company's volumes Rose said, "On a more positive note, however, year-over-year declines in freight volumes for the month of September (as compared to September 2008), were at the lowest levels we've experienced all year. Airfreight tonnage was down 6% while ocean freight container counts were down 17%."
In the sequentially preceding second quarter, net earnings attributable to shareholders dropped to $54.07 million from $71.25 million reported in the same period last year. On a per share basis, net earnings attributable to shareholders slipped to $0.25 from $0.32.
For the quarter under review, the company's the largest segment, airfreight service revenues declined to $457.40 million from $703.15 million a year earlier. Ocean freight and ocean services revenues dropped to $331.45 million from $567.15 million for the same period last year.
Operating income was $96.25 million, down from $135.40 million last year. Total operating expenses dropped to $941.08 million from $1.43 billion last year helped by drop in freight consolidation expenses.
For the nine-month period, net earnings attributable to shareholders dropped 23% to $171.08 million or $0.79 per share from $223.39 million or $1.02 per share in the same period last year. Revenues for the period dropped 34% to $2.84 billion from $4.33 billion a year-ago.
On October 20, C.H. Robinson Worldwide, Inc. (CHRW), a non-asset based third party logistics provider, reported a 2% rise profit for its third quarter to $95.46 million from $93.56 million in the prior year period and earnings per share increased 5.6% to $0.57 from $0.54 a year-ago. However, total revenues declined 15.6 % to $1.954 billion from $2.316 billion in the year-earlier period.
Looking forward, Rose said, "While we'll be the first to acknowledge 2009 has been a tough year, we remain very positive on how we're positioned for the future, particularly as the global economy gradually strengthens. A strong balance sheet with nearly $1 billion in cash is very stabilizing. With 252 locations throughout the world we're able to grow market share everywhere we have a network presence."
EXPD is currently trading at $32.40, down $1.04 or 3.11%, on Nasdaq. The stock in the last 52-week period, traded on a broad range of $23.86 to $40.50 with three month moving average of 2.20 million shares.
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