Logistics Company Expeditors Struggles In Q4: Revenue And Profits Plunge Amid Market Uncertainty And Cost Challenges

Expeditors International Of Washington, Inc. EXPD reported a fourth-quarter fiscal 2023 revenue decline of 34% Y/Y to $2.28 billion, missing the consensus of $2.31 billion.

Airfreight tonnage volume decreased by 3%, and ocean container volume decreased by 10%. EPS of $1.09, down 22% YoY, missed the consensus of $1.23.

Operating income decreased 40% to $199.39 million, and the margin fell 80 bps to 8.7%.

During the three and twelve months ended December 31, 2023, EXPD repurchased 1.6 million and 12.1 million shares of common stock at an average price of $119.22 and $114.68 per share, respectively.

Additionally, on February 19, 2024, the Board of Directors amended the Discretionary Stock Repurchase Plan to authorize share repurchases down to 130 million shares of common stock.

“While ocean and air markets have been recovering from the massive disruptions brought on by the global Covid-19 pandemic, we continue to face further market uncertainty due to the current conflicts in the Middle East and on the Red Sea,” commented Jeffrey S. Musser, President and Chief Executive Officer.

“Further, volumes and capacity have remained uncertain due to additional capacity recently brought into the marketplace, while shippers have cautiously sought to avoid overextending their inventory levels,” added Musser.

Bradley S. Powell, Senior Vice President and Chief Financial Officer, commented, “Even though compensation, our largest and most variable expense, is 20% lower than the same quarter a year ago, just about everything else is more expensive. We are not as efficient as we need to be for the current environment of excess capacity, weak demand, soft rates, and economic uncertainty.”

The company generated $1.05 billion in cash flow from operations in 2023, compared to $2.13 billion in 2022, and it also returned $1.6 billion to shareholders in share repurchases and dividends.

Price Action: EXPD shares are trading lower by 6.80% at $115.72 on the last check Tuesday.