Expeditors International (NASDAQ:EXPD) reported its financial results for the second quarter of 2019 on the morning of August 6, before markets opened. Expeditors' earnings per share of $0.88 beat the Street's estimates of $0.80 (overall net earnings attributable to shareholders grew 9 percent year-over-year to $153 million).

The Seattle-based international freight forwarder grew revenues by 4 percent to $2.03 billion and net revenues by 3 percent to $661.6 million. 

The third-party logistics provider managed to navigate the stormy seasons of an intensifying U.S.-China trade war and a general slowdown in the global economy, managing through a 7.5 percent year-over-year reduction in air freight revenue and flattish ocean freight revenues. Customs brokerage was the big star of the quarter, growing revenues in that division by 19.8 percent year-over-year to $750.1 million for the quarter.

As demand for transportation services slackened into 2019 and capacity on all modes loosened, Expeditors experienced a 5 percent decrease in air tonnage volume compared to the year prior and a 2 percent increase in ocean container volume. International freight forwarders typically take wider margins on a lower volume of air freight and a narrower margin on higher volumes of ocean freight.

After EXPD posted its results, Deutsche Bank analyst Seldon Clarke lauded the freight forwarder for improving its operating performance in a tough business environment.

"Despite another quarter of net revenue margin compression (-30bps year-over-year), EXPD was able to expand gross profit margins (+50bps year-over-year) through better employee productivity," Clarke wrote.

Image sourced from Pixabay

Expeditors breaks out its gross and net revenue results by region, which can serve as a useful map of trends in global trade.

Solid economic growth in the United States brought revenues up 13.8 percent to $681 million, while ‘Other North America,' presumably including Canada and Mexico, was only up 1.5 percent to $85.5 million. Latin American gross revenues were down 9 percent to $38.7 million for the quarter.

Expeditors was hurt most by a sharp decline in revenues from North Asia – i.e., China – which is one of its most important regions. North Asia revenues were down 8.5 percent to $621.9 million for the quarter. South Asia revenues were up 1 percent to $181.3 million. Europe revenues were down 3.4 percent to $319.3 million, and Africa and India revenues were down 4.9 percent to $108.3 million.

EXPD management did not offer forward-looking guidance in the release and does not conduct analyst conference calls.