Expeditors Third-Quarter Profit Jumps 55% As AI Hyperscaler Demand Strains Air Capacity
Revenue climbed 42% to $4.1 billion, and the logistics company returned $197 million to shareholders through buybacks in the quarter.
Expeditors International of Washington, which buys cargo space from airlines, ocean carriers and truckers and resells it to shippers, said third-quarter earnings per share rose 62% to $2.65 as demand from AI hyperscalers outran tight air capacity. Revenue climbed 42% to $4.1 billion, the company reported Tuesday.
Profit outruns revenue
Operating income rose 55% to $445 million, and net earnings attributable to shareholders rose 55% to $345 million. Per-share profit grew faster because of a lower tax rate and a lower share count, CFO David A. Hackett said.
Headcount rose only 1% from a year earlier while revenue grew 42%. Operating efficiency reached 36.7%, which Hackett said is "well above our historical target of 30%."
Airfreight revenue was $1.54 billion and ocean freight and services brought in $1.10 billion. Customs brokerage and other services added about $1.46 billion. In nine months, revenue rose 27% and diluted EPS rose 43% to $6.38.
Hyperscalers and tight air capacity
Airfreight tonnage rose 13% and ocean container volume rose 7%. September was the strongest month, with airfreight up 19% and ocean up 12%.
The company said hyperscaler demand, including shipments from suppliers supporting AI infrastructure, was a significant driver of air volume. Air capacity remains constrained by limited fleet expansion and aircraft delivery delays, and rates stayed elevated.
Ocean shipping faced congestion at major Asian ports after three back-to-back typhoons. Expeditors said it expects congestion and supply chain challenges to persist through the remainder of 2026.
CEO Daniel R. Wall said demand from customers such as hyperscalers "has been outpacing the market overall," while the company works to broaden its customer base.
Buybacks and Investor Day
Expeditors returned $197 million to shareholders through share repurchases in the quarter and $946 million in dividends and repurchases for the first nine months of 2026. Shares traded at $205.16 in Tuesday trading, up 2.29% from the prior close of $200.56.
The company holds an Investor Day in New York on the morning of Wednesday, November 18. Written questions sent by the end of business on November 6 will be considered for its "Responses to Selected Questions" 8-K.
Expeditors will take questions from investors at its November 18 Investor Day in New York.
