News / Earnings season looms, with all eyes on the 'health' of Expeditors

The financial third quarter closed on Friday, and now all eyes are on what’s next when listed companies begin reporting quarterly results in about two weeks’ time.

It is expected to be one the most exciting earnings seasons since the onset of the pandemic.

First up is 3PL and intermodal firm JB Hunt from the US, where we would see the damage done to its balance sheet by the severe congestion on US intermodal services out of west coast terminals.

However, given how key the transpacific tradelane – across all modes – has become to carriers and forwarders alike, all eyes are on its leading players.

In ocean freight, while recent league table findings on freight forwarder market shares have been disputed – read Flexport smashes it – US forwarder Expeditors’ results are likely to be the most closely watched in the market, given that it is commonly identified as the bellwether transpacific operator.

Just a couple of metrics will tell more about the status of a 3PL commonly among the healthiest in the industry.

For example, in Q2 22, the cash-rich forwarder from Seattle experienced a drop of 7.6% in cash and cash equivalents to $1.97bn, compared with Q1 22, and given its debt-free balance sheet, one question is how that cash pile has been deployed. And its quarter-on-quarter trend. 

Despite the recent decline in transpacific freight rates, it remains likely Expeditors’ net cash pile may be set to hit a record – although that does also depend on the speed of its share repurchases, which are unlikely to have materially decelerated. 

There is also the issue of how it has responded to the cyber attack that weighed on its H1 22 performance; in Q2 22, Expeditors suffered a drop of 1.3% in sales, compared with Q1 22, and there didn’t appear to be any seasonality embedded in that.

While all eyes are on the ocean trade, in Q2 22 notably, the firm experienced a modest 0.3% rise in air freight sales on Q1 22, while the unit’s operating costs, on a sequential quarterly basis, rose 6.1%.

Expeditor’s third-quarter results are also expected to be accompanied by the latest developments of its new strategic plan.