Wrapping up Q3 earnings, we look at the numbers and key takeaways for the air freight and logistics stocks, including GXO Logistics (NYSE: GXO) and its peers.
The growth of e-commerce and global trade continues to drive demand for expedited shipping services, presenting opportunities for air freight companies. The industry continues to invest in advanced technologies such as automated sorting systems and real-time tracking solutions to enhance operational efficiency. Despite the advantages of speed and global reach, air freight and logistics companies are still at the whim of economic cycles. Consumer spending, for example, can greatly impact the demand for these companies’ offerings while fuel costs can influence profit margins.
The 6 air freight and logistics stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was 1% below.
Thankfully, share prices of the companies have been resilient as they are up 7.5% on average since the latest earnings results.
GXO Logistics (NYSE: GXO)
With notable customers such as Nike and Apple, GXO (NYSE: GXO) manages outsourced supply chains and warehousing for various companies.
GXO Logistics reported revenues of $3.40 billion, up 7.5% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a solid beat of analysts’ adjusted operating income estimates but revenue guidance for next quarter missing analysts’ expectations.
Patrick Kelleher, chief executive officer of GXO, said, “We delivered record revenue in the third quarter, as well as double-digit adjusted EBITDA growth, underscoring the strength and resilience of GXO’s business model. New business wins rose 24% year over year, and our commercial pipeline, which stands strong at $2.3 billion, is geographically diversified and scaling in high-growth sectors. The integration of Wincanton is progressing swiftly, with synergy realization on track, and as we approach year-end, we’re pleased to reaffirm our full-year guidance.
GXO Logistics achieved the fastest revenue growth of the whole group. Still, the market seems discontent with the results. The stock is down 12.4% since reporting and currently trades at $53.54.
Read our full report on GXO Logistics here, it’s free for active Edge members.
Best Q3: Expeditors (NYSE: EXPD)
Expeditors (NYSE: EXPD) offers air and ocean freight as well as brokerage services.
Expeditors reported revenues of $2.89 billion, down 3.5% year on year, outperforming analysts’ expectations by 8.6%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
Expeditors delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 12.4% since reporting. It currently trades at $137.80.
Is now the time to buy Expeditors? Access our full analysis of the earnings results here, it’s free for active Edge members.
Slowest Q3: Hub Group (NASDAQ: HUBG)
Started with $10,000, Hub Group (NASDAQ: HUBG) is a provider of intermodal, truck brokerage, and logistics services, facilitating transportation solutions for businesses worldwide.
Hub Group reported revenues of $934.5 million, down 5.3% year on year, exceeding analysts’ expectations by 0.7%. Still, it was a mixed quarter as it posted a significant miss of analysts’ sales volume estimates.
The stock is flat since the results and currently trades at $35.68.
Read our full analysis of Hub Group’s results here.
United Parcel Service (NYSE: UPS)
Trademarking its recognizable UPS Brown color, UPS (NYSE: UPS) offers package delivery, supply chain management, and freight forwarding services.
United Parcel Service reported revenues of $21.42 billion, down 3.7% year on year. This result surpassed analysts’ expectations by 2.5%. Overall, it was an exceptional quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is up 4% since reporting and currently trades at $92.85.
Read our full, actionable report on United Parcel Service here, it’s free for active Edge members.
FedEx (NYSE: FDX)
Sporting one of the largest air cargo fleets in the world, FedEx (NYSE: FDX) is a global provider of parcel and cargo delivery services.
FedEx reported revenues of $22.24 billion, up 3.1% year on year. This number beat analysts’ expectations by 2.7%. It was a strong quarter as it also produced a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ revenue estimates.
The stock is up 12.9% since reporting and currently trades at $256.09.
Read our full, actionable report on FedEx here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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