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Is a Beat in Store for Expeditors (EXPD) in Q4 Earnings?

Zacks Equity Research
·3-min read

Expeditors International of Washington EXPD is scheduled to report fourth-quarter 2022 results on Feb 21, before market open.

The Zacks Consensus Estimate for EXPD’s fourth-quarter 2022 earnings has been revised upward by 0.5% in the past 60 days. The company also has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 22.1%.

Given this backdrop, lets unearth the reasons which are likely to have influenced Expeditors’ fourth-quarter 2022 earnings performance.

We expect supply-chain woes to have hurt Expeditors’ fourth-quarter performance. The Zacks Consensus Estimate for Airfreight Services’ revenues is pegged at $1.41 billion, indicating a 5% decline from the third-quarter 2022 reported number.

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The Zacks Consensus Estimate for Ocean Freight and Ocean Services’ revenues is pegged at $1.36 billion, indicating a 19.5% decline from the prior-quarter reported number.

The Zacks Consensus Estimate for Customs Brokerage and Other Services’ revenues is pegged at $1.04 billion, indicating a 12.6% decline from the prior-quarter reported number. Moreover, labor and infrastructure constraints, and congestion at the ocean ports due to labor and equipment shortages, are likely to have hurt Expeditors’ fourth-quarter performance. Additionally, escalating operating expenses across all segments might have dented the company’s bottom line.

What Our Model Says

Our proven model predicts an earnings beat for Expeditors this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat which is the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Expeditors has an Earnings ESP of +2.66% and a Zacks Rank #2.

Highlights of Q3

Expeditors’ third-quarter 2022 earnings of $2.54 per share surpassed the Zacks Consensus Estimate of $1.92. The bottom line increased 21.5% year over year. Total revenues of $4,362.14 million surpassed the Zacks Consensus Estimate of $4,147 million and increased 1% year over year.

Q4 Performances of Some Transportation Companies

United Airlines’ UAL fourth-quarter 2022 earnings of $2.46 per share beat the Zacks Consensus Estimate of $2.07. In the year-ago quarter, UAL incurred a loss of $1.60 per share when air-travel demand was not as buoyant as in the current scenario. The fourth quarter of 2022 was the third consecutive profitable quarter at UAL since the onset of the pandemic.

Operating revenues of $12,400 million beat the Zacks Consensus Estimate of $12,230 million and increased 51.37% year over year owing to upbeat air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.9% from fourth-quarter 2019 (pre-COVID-19) levels.

Delta Air Lines’ DAL fourth-quarter 2022 earnings (excluding 19 cents from non-recurring items) of $1.48 per share beat the Zacks Consensus Estimate of $1.29. DAL reported earnings of 22 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.

DAL reported revenues of $13,435 million, which also surpassed the Zacks Consensus Estimate of $13,030.3 million. Driven by the high air-travel demand, total revenues increased more than 41.87% on a year-over-year basis.

CSX Corporation’s CSX fourth-quarter earnings of 49 cents per share beat the Zacks Consensus Estimate of 47 cents and improved 16.67% year over year.

Total revenues of $3,730 million surpassed the Zacks Consensus Estimate of $3,722.1 million. The top line increased 8.84% year over year on the back of higher fuel surcharge, pricing gains, an increase in volumes, and an increase in storage and other revenues. Overall revenues per unit increased 11%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

 


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CSX Corporation (CSX) : Free Stock Analysis Report

Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report

United Airlines Holdings Inc (UAL) : Free Stock Analysis Report

Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report

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Zacks Investment Research