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 Expeditors International of Washington Inc. reported Tuesday second-quarter profit and revenue that rose well above expectations, and said logistics challenges are likely to remain through the rest of the year while demand is expected to remain robust. The airfreight and ocean freight company's stock was still inactive in premarket trading. Net income rose to $316.4 million, or $1.84 a share, from $183.9 million, or $1.09 a share, in the year-ago period. The FactSet consensus for earnings per share was $1.63. Revenue increased 49.7% to $3.61 billion, above the FactSet consensus of $3.40 billion. Cost of transportation and other expenses rose 56% to $2.60 billion. "Robust demand is bumping up against capacity constraints in the air and ocean markets, all of which is made more challenging by limited warehouse space, staffing constraints, port congestion, equipment dislocations, and driver shortages, not to mention additional disturbances such as the closure of the Yantian port due to a COVID-19 outbreak in May or the blockage of the Suez Canal back in March," said Chief Executive Jeffrey Musser. "While we remain optimistic that conditions will improve over time, we are unable to predict when that might take place, or how even the recovery might be, and we believe that demand will likely continue to outstrip capacity in both air and ocean for the near term, keeping buy/sell rates unsettled for at least the duration of 2021." The stock has rallied 12.0% over the past three months, while the Dow Jones Transportation Average has dropped 8.0% and the Dow Jones Industrial Average has gained 2.1%.
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Some stocks are worth their premium valuations. This is one of those stocks.
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Shares of Arconic Corp. slipped 0.2% in premarket trading Tuesday, after the aluminum company swung to a loss, which included a one-time pension charge, and revenue that came up a bit shy of forecasts. The net loss was $427 million, or $3.89 a share, after net income of $52 million, or 48 cents a share, in the year-ago period. The results included a pension settlement charge of $423 million related to the partial annuitization of U.S. pension obligations. Sales increased 51.7% to $1.80 billion, but was below the FactSet consensus of $1.87 billion, as rolled products revenue grew 67.5% to $1.47 billion. Arconic raised its 2021 revenue guidance range to $7.3 billion to $7.6 billion from $7.1 billion to $7.4 billion. The company said after buying back nearly $9 million worth of stock in the second quarter, it repurchased more than doubled that amount during July. The stock has run up 18.9% year to date through Monday, while the S&P 500 has gained 16.8%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
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