Expeditors International of Washington Inc. announced profits slipped 6.2% in the second quarter, echoing the trend across the third-party logistics industry where tighter margins and higher expenses outpaced the growth in freight compared with last year.
The Seattle company made $108.9 million in profits last quarter or 60 cents per share. However, the results slightly beat out the Bloomberg News consensus forecast of 59 cents.
One year ago, Expeditors earned $116.1 million or 63 cents.
Revenue grew 13% to $1.67 billion, which was better than the $1.62 billion forecast.
“Our order management, warehousing and distribution, Transcon and customs brokerage businesses performed exceptionally well during the quarter. While we experienced similar margin pressures that we have seen in recent quarters in our air and ocean offerings, we recorded some of the highest freight volumes in our company’s history,” CEO Jeffrey Musser said.
Airfreight revenue increased 15% to $671.9 million, but its operating income dropped to $172.5 million from $178.7 million a year ago.
Ocean freight revenue went up 14% to $528.6 million and operating income increased 1.2% to $142.7 million.
Customs brokerage revenue improved 10% to $471.8 million and operating income grew 6.5% to $248.5 million.
The biggest cost expenses that dragged on the bottom line was salaries and wages, which went up 8.5% year-over-year to $318.5 million.