Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced third quarter 2022 financial results including the following highlights compared to the same quarter of 2021:

• Diluted Net Earnings Attributable to Shareholders per share (EPS¹) increased 22% to $2.54
• Net Earnings Attributable to Shareholders increased 15% to $414 million
• Operating Income increased 8% to $527 million
• Revenues increased 1% to $4.4 billion
• Airfreight tonnage volume and ocean container volume decreased 13% and 10%, respectively

“We continued to perform at a very high level, generating another strong quarter of financial performance and cash flow,” said Jeffrey S. Musser, President and Chief Executive Officer. “We accomplished this despite uncertain economic conditions that resulted in declines in tonnage and volumes, reductions in both buy and sell rates, and an overall rebalancing of capacity in the logistics freight markets. These conditions have continued in recent weeks and we believe that inflation, high energy costs, and government fiscal and monetary measures will continue to exert pressure on global supply chains. Additionally, many shippers are now looking to shrink retail inventories that were overstocked earlier in the year in reaction to COVID-related supply chain disruptions.

“All of our people and products performed well during the quarter, as buy and sell rates remained volatile while declining from their pandemic peaks. Once again, we were able to adjust quickly to rapidly evolving operating conditions in which pandemic-induced demand and supply chain constraints gave way to falling demand, and while not completely eliminated, an easing of many of the labor and equipment shortages and the bottlenecks that had so severely constrained capacity and impeded throughput at the ports over the past two years. We are also seeing air capacity return to higher levels, with Hong Kong and other origins in Asia reopening. In addition, the largely land- and port-based constraints that had so severely impacted the ocean market have significantly improved to where carriers are once again starting to manage capacity in certain trade lanes in an effort to address declining demand while sustaining falling rates.

“Based on what we currently see, these changing conditions that involve decelerating demand and an overall decline in rates are likely to continue for the remainder of 2022 and into 2023. Just as we quickly adapted to unprecedented operating conditions spurred by the pandemic, we are adjusting for this new operating environment and continue to make focused efforts to control costs. Most critically, we remain fully engaged with our customers to accommodate their needs for capacity and services, while looking forward to when the economy eventually reverses course and demand starts to increase again.”

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “As we have commented previously, we did not expect the unprecedented COVID-related operating conditions to persist long-term. We believe we are now seeing a changing environment. While many concurrent disruptions continue to plague our industry, including the quarantines in China, the conflict in Ukraine, and the shortage of labor and certain equipment, conditions are starting to ease. We now believe we are seeing a shift towards slowing volumes and falling rates. We have been here before and know which levers to pull to enhance our efficiencies and control costs. We are ready to further align ourselves with a post-COVID environment of higher inflation and tapered demand. We do not know how long these new conditions will last. We will continue to invest appropriately for the long-term in our people, processes, and technology, and we believe we will be fully capable of meeting the eventual upturn in demand.” Mr. Powell noted that the Company benefitted from a favorable tax rate during the quarter and returned over $1 billion to shareholders via repurchased stock so far this year.

Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 176 district offices and numerous branch locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution and customized logistics solutions.

Disclaimer on Forward-Looking Statements:

Certain statements contained in this news release are “forward-looking statements,” based on management’s views with respect to future events and underlying assumptions that involve risks and uncertainties. These forward-looking statements include statements regarding the future stabilization of supply/demand imbalance and rate volatility; the continued unsettled operating environment due to uncertain air and ocean capacity; volatile air and ocean pricing and uneven demand for such services; port congestion; equipment imbalances; labor shortages; uncertain availability of warehouse and pier space; trade disruptions; rising fuels costs; the conflict in Ukraine; inflation, high energy costs, government fiscal and monetary measures, and signs of a slowing economy and drop in demand; and the uneven lifting of the COVID-19 pandemic restrictions around the world. Future financial performance could differ materially because of factors such as: our ability to leverage the strength of our carrier relationships to secure space; the strength of our non-asset-based operating model; our expectation that the supply/demand imbalance, rate volatility, and various on-shore bottlenecks may continue; our ability to control costs and continue to enhance our productivity; our ability to invest in our strategic efforts to explore new areas for profitable growth; and our ability to remain a strong, healthy, unified and resilient organization. The ongoing impact of the COVID-19 pandemic could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission. These and other factors are discussed in the Company’s regulatory filings with the Securities and Exchange Commission, including those in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and the Company’s most recent Form 10-Q. The forward-looking statements contained in this news release speak only as of this date and the Company does not assume any obligation to update them except as required by law.

During the three and nine months ended September 30, 2022, we repurchased 4.5 million and 9.5 million shares of common stock at $103.56 and $106.84 per share, respectively. During the three and nine months ended September 30, 2021, we repurchased 0.6 million and 2.0 million shares of common stock at an average price of $124.95 and $110.45 per share, respectively.

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on November 11, 2022 will be considered in management's 8-K “Responses to Selected Questions.”

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