Expeditors International of Washington reported a record second quarter profit of $95 million on Tuesday, but the forwarder saw growth rates slow down sharply while ocean and air freight volume declined late in the quarter.
The net profit grew 5 percent over the second quarter a year ago after growing about 50 percent in the first quarter and gross revenue expanded only 4 percent, to $1.58 billion, after growing 22 percent year-over-year in the first quarter.
The slower growth came, Seattle-based Expeditors said, as freight volume slowed down during the quarter and the forwarder saw margins pressured in its core operations.
Air freight volume fell 6 percent in May and 5 percent in June, leaving that largest share of Expeditors’ business down 1 percent in the quarter from a year ago. Ocean freight volume fell 7 percent in June and was flat for the quarter.
Net revenue in the air freight and ocean freight operations was almost flat in the second quarter compared to the first quarter despite significant growth in gross revenue, suggesting the forwarder was pressed to keep up with direct transportation costs.
But the operating profit still grew 10 percent over last year, to $152.3 million, and Expeditors Chairman and CEO Peter J. Rose said that showed the company “executed well, particularly given all the factors currently in play.”