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Why Expeditors International of Washington (EXPD) is Down Today

NEW YORK (TheStreet) -- Expeditors International of Washington (EXPD - Get Report) fell 7.02% to $39.06, down $2.95 from its previous close of $42.01, at the close of the trading day on Tuesday after the global logistics and freight forwarding company reported fourth-quarter earnings that missed analysts' estimates. 

The company reported earnings per share of 41 cents, six cents worse than the Capital IQ consensus estimate of 47 cents a share. Revenues rose 5.9% year over year to $1.63 billion, which beat the consensus estimate of $1.58 billion.

Airfreight volumes rose 5% year over year, while ocean freight volumes increased nearly 16%.

"Airfreight pricing remained remarkably consistent with the 2012 fourth quarter while pricing in the ocean freight market continued to be weak and somewhat volatile, reflecting the underlying economic challenges that faced ocean freight carriers caused primarily by overcapacity concerns," said Chairman and CEO Peter J. Rose in the company's statement. "We also saw the impact of these volume increases spill over into customs brokerage and other services. 

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"While it is increasingly acknowledged that the state of the global economy is still not nearly as robust as government, economic and financial pundits would all have us believe, we've still found ways to grow profitably while remaining true to the fundamental principles which have been the catalyst for developing this company that had 6 offices and 20 people in 1981 into the $6 billion, nearly 14,000 person, Fortune 500 company it is today."

The stock had a volume of 4,905,723, more than four times its average of 1,079,380. It hit a high of $41.91 and a low of $38.70 for the day. The stock holds a one-year high of $46.90 and a one-year low of $34.83.

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TheStreet Ratings team rates EXPEDITORS INTL WASH INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate EXPEDITORS INTL WASH INC (EXPD) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EXPD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.82, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $96.29 million or 39.22% when compared to the same quarter last year. In addition, EXPEDITORS INTL WASH INC has also vastly surpassed the industry average cash flow growth rate of -79.65%.
  • EXPEDITORS INTL WASH INC has improved earnings per share by 7.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EXPEDITORS INTL WASH INC reported lower earnings of $1.57 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus $1.57).
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Air Freight & Logistics industry average. The net income increased by 4.4% when compared to the same quarter one year prior, going from $88.49 million to $92.40 million.
  • You can view the full analysis from the report here: EXPD Ratings Report

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