No. of Recommendations: 3
Hi everyone,


It missed just slightly on revenue ($1.50 B vs. $1.54 B expected) and beat on EPS ($0.45 vs. $0.43 expected).

This company's stock has been in the doldrums for the past couple of years, trading in the $36 to $46 price range or so. Yet I believe good times are ahead for the company and shareholders.

There are more and more indicators that the U.S. and world economies are improving. Housing recovery, increased shipments and performance by BNSF and CNI railroads, nice results from Berkshire's wide swath of companies, higher sales of autos worldwide (generally) by Ford and BMW, container volumes through west coast ports up this year compared to last year (not by much, granted, but up), and so on. This kind of data supports CEO Rose's comment that improvements seen in Q1 continued to play out in Q2. For context, Q1 2013 was the "second best first quarter we've ever had."

While net revenue was up 3%, net earnings were up 10% and EPS was up 13% YoY for the quarter. (Net revenue is the revenue it actually keeps after billing for and paying the costs of shipments to the airlines and shipping companies it contracts with and is, to my mind, a better indicator than total revenue.)

If you haven't yet read the May 2013 8-K (Q&A), take a few minutes to do so, especially the first 7 questions and No. 16: The first question is a great rebuttal to the idea that a company should engage in currency hedging (including a quote from Ben Stein), while No. 16 is a good answer to the question of, "Why hasn't your stock price done much?" It starts, "If we understood the stock market, we might have your job."

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No. of Recommendations: 2
My favorite was #20:

Why is Expeditors a publicly traded company?

Because someone, no longer here, thought it would be a good idea back in 1984 to become more liquid. Being a public company is a little bit like being a crab in one of the crab pots on “Deadliest Catch.” It's very easy to get into that pot and well-nigh impossible to get out of it. From a financial perspective, we have never needed the capital. We still have the money from our initial IPO (all $40 million of it) sitting in one of our bank accounts.

However, from a larger context, being a public company does allow us to get business that we might not otherwise be able to get.
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No. of Recommendations: 0
That was a good one. Interesting perspective.

There definitely is a lot of ... um, "stuff" that public companies have to put up with, mostly driven by Wall Street's focus on the next quarter. No desire in playing that game keeps many companies private -- Trader Joe's, for instance. And TMF, for that matter.

Was talking this over with Jason Moser (TMFJMo) just now and he asked if EXPD would go private. Had to say, from what I know, I don't think so. I don't think Rose would cry a single tear if it happened, but I also don't think he'd do it himself. He's had nearly 20 years to do it if he really wanted to. And his commitment to all stakeholders, including shareholders, comes through loud and clear in these 8-Ks.

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