Expeditors International saw its profit fall despite higher revenues, missing Wall Street expectations in its first earnings report after the departure of longtime leader Peter Rose.
Operating income also came in slightly below target. Profit was $91.3 million, a 1 percent decrease from the same period last year, which translated to 46 cents per share. Analysts had expected 47 cents per share.
Shares of the logistics provider fell 5.5 percent, or $2.42, to $41.40 as investors readjusted their views on its fundamentals, which pointed to growing ocean and airfreight volumes but also to high volatility in prices.
Growth surged in Expeditors’ European business, but lagged in the Americas and fell in the key Asia Pacific region, CEO Jeff Musser said in an earnings release.
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Expeditors’ disappointing results come at a time of transition for the company as it seeks to reignite the rapid growth of earlier years.
Founder Rose, who built the Seattle company into a global powerhouse, stepped down as CEO in March, leaving his son-in-law at the reins, and unexpectedly resigned as chairman in May.
The company is also in the midst of a formal review of its business operations, but investors could glean little about the progress of the restructuring from Tuesday’s earnings release.
At this point, said Mike Roarke, a McAdams Wright Ragen analyst, “it is unclear what kind of path the company is going to be charting.”
One thing is clear, he said: The company’s corporate missives, colorful and blunt under Rose’s tenure, are taking on a much blander, MBA-like tone. “It’s really striking to see how the language has changed,” he said.
An example from Musser’s statement Tuesday, when talking about the company’s internal review of its business: “The assessment process will necessitate a reallocation of resources. This will require us to focus very carefully on optimizing existing resources to internally fund our strategic objectives without requiring excessive additions to overall head count.”
That’s a markedly different style from Rose, who in a February earnings release quoted Greek philosopher Heraclitus, noting that “2,500 years ago, (he) coined the phrase, ‘Change is the only constant in life.’ ”