Expeditors International of Washington, Inc. EXPD currently benefits from an uptick in airfreight revenues. However, a decline in its current ratio is concerning.

Expeditors’ first-quarter 2022 earnings of $2.05 per share surpassed the Zacks Consensus Estimate of $1.77. The bottom line rose 22.75% year over year. Total revenues of $4,664.3 million outperformed the Zacks Consensus Estimate of $4,175.6 million and also increased 38.9% year over year.

How is Expeditors Faring?

Expeditors is being aided by the uptick in airfreight revenues. Revenues from its airfreight services segment soared 63.3% year over year in 2020. The coronavirus-induced cancellation of multiple passenger flights (that usually carry freight as well as passenger luggage) increased the usage of charters. Due to the pandemic-led imbalance between scheduled capacity and demand, EXPD is using charters to meet customer needs. Revenues from the airfreight services unit increased 58.4% year over year in 2021. Despite the cyberattack-related woes, segmental revenues climbed 20.6% in first-quarter 2022. Revenues from the segment are expected to be strong in the second quarter of 2022 as well. Results will be available on Aug 2.

We are impressed by Expeditors' efforts to reward its shareholders through dividend payments and buybacks. In the coronavirus-ravaged 2020, EXPD repurchased 4.6 million shares at an average price of $72.26 per share. During 2021, EXPD bought back 4.4 million shares at an average price of $117.54 per share. In May 2022, management had announced a 15.5% hike in semi-annual cash dividend to 67 cents per share (annualized $1.34 per share).

The year-over-year decline in Expeditors' current ratio in first-quarter 2022 is concerning. EXPD's current ratio in first-quarter 2022 was 1.87 compared with 2.05 at the end of the first quarter of 2021.

Zacks Rank & Key Picks

Expeditors currently carries a Zacks Rank #3 (Hold). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Transportation sector are Kirby Corporation KEX, C.H. Robinson Worldwide, Inc. CHRW and GATX Corporation GATX.

Kirby has a trailing four-quarter surprise of 7.7%, on average, with its earnings having surpassed the Zacks Consensus Estimate in two of the last four quarters (one miss and one meet on the remaining two occasions).

Strong segmental performances are boosting Kirby’s top line. The distribution and services segment is benefiting from increased demand for products and services. KEX currently carries a Zacks Rank #2 (Buy).

The expected long-term (three-to-five years) earnings per share (EPS) growth rate for C.H. Robinson is pegged at 9%. Better freight market conditions are aiding CHRW.

In first-quarter 2022, the top line improved 41.8% owing to favorable truckload pricing for customers and handsome profits in ocean freight. CHRW currently carries a Zacks Rank of 2.

GATX has a trailing four-quarter surprise of 40.1%, on average, with its earnings having surpassed the Zacks Consensus Estimate in all the last four quarters.

The gradual improvement in the North American railcar leasing market is a boon for GATX. GATX currently has a Zacks Rank of 2.

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