Expeditors International of Washington improved net profit 11 percent in the third quarter to $106.6 million despite a 4 percent decline in gross revenue in a weakening freight shipping market.
Expeditors said net revenue — the overall revenue minus direct transportation costs — expanded 8 percent over the same quarter a year ago, to a quarterly record $493.8 million. That gave the Seattle-based freight forwarder strong results in a period that saw many transport carriers stagger financially under stagnant demand and plentiful capacity.
Expeditors Chairman and CEO Peter J. Rose said the company had focused on “efficiency and financial results” even as air freight volume fell 4 percent year-over-year in the quarter and ocean freight slipped 2 percent.
“Maximizing gross revenues to the potential detriment of operating income has never been what’s motivated us,” Rose said. “With all the dynamic factors (in shipping), … net revenue growth is a much more indicative measurement of operational effectiveness than mindlessly chasing growth in gross revenues …
“These are important nuances in our business, and many fail to absorb them,” he said.
Expeditors improved its net revenue 15 percent in the first nine months of the year to $1.4 billion, well ahead of the 6 percent gain in gross revenue, which hit $4.6 billion. With a $292.8 million net profit in the first three quarters, 18 percent ahead of 2010, the company is on its way to a record year for earnings.