Expeditors International of Washington : Expeditors 1Q Net Down 16% As Airfreight Revenue Falls
05/02/2012| 06:20pm US/Eastern
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Expeditors International of Washington Inc.'s (EXPD) first-quarter earnings fell 16% as the global logistics company recorded a decline in airfreight services revenue.
Expeditors provides services like air- and ocean-freight forwarding, customs clearance and marine insurance. The company had recently warned that earnings would fall short of Street views, blaming a shaky global economy for lighter volumes, particularly from airfreight customers.
Expeditors has said it planned to become more aggressive in containing costs and expanding both its customer base and its reach within its existing base.
Wednesday, Chief Executive Peter J. Rose said many of the company's largest customers are being very cautious about the amount of airfreight they are using this year. Rose also noted the company experienced a strong reduction in year-over-year airfreight tonnage and a margin contraction in March, a month that is usually a very significant airfreight month from a tonnage perspective.
The company reported a profit of $76.7 million, or 36 cents a share, down from $91.2 million, or 42 cents a share, a year earlier. The company had recently projected earnings of 35 cents to 37 cents a share, a view that fell short of Wall Street estimates at the time.
Revenue fell 3.4% $1.41 billion. Analysts polled by Thomson Reuters most recently expected revenue of $1.38 billion.
Operating margin narrowed to 8.9% from 10.1%.
Airfreight services revenue, the biggest contributor to the top line, fell 8.8% while ocean freight and ocean services revenue slipped 1.4%. Revenue from customs brokerage and other services was up 5.7%.
Shares closed at $40.74 Wednesday and were unchanged after hours. The stock is down 25% over the past 12 months.
-By Kristin Jones and Nathalie Tadena; Dow Jones Newswires; 212-416-2208; kristin.jones@dowjones.com
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