The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Hub Group (NASDAQ:HUBG) and the rest of the air freight and logistics stocks fared in Q3.
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 7 air freight and logistics stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 15.4% below.
In light of this news, share prices of the companies have held steady as they are up 3.2% on average since the latest earnings results.
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 $986.9 million, down 3.7% year on year. This print fell short of analysts’ expectations by 7.1%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates and full-year revenue guidance missing analysts’ expectations.
“I am pleased with the team’s performance in the third quarter as our disciplined market approach resulted in Intermodal volume growth of 12% and adjusted EPS growth in the quarter. In addition, we recently closed the joint venture with EASO to enhance our solutions for our customers and add significant scale to our Intermodal capabilities in Mexico. Although market conditions remain challenging, we continue to enhance earnings stability and growth over the long term by focusing on yield management, effectively managing costs, our capital structure, and providing excellent service to our customers,” said Phil Yeager, Hub Group’s President, Chief Executive Officer and Vice Chairman.
Hub Group delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 18.9% since reporting and currently trades at $52.02.
Read our full report on Hub Group here, it’s free.
Best Q3: Expeditors (NYSE:EXPD)
Expeditors (NYSE:EXPD) offers air and ocean freight as well as brokerage services.
Expeditors reported revenues of $3 billion, up 37% year on year, outperforming analysts’ expectations by 21.3%. The business had an incredible quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
Expeditors achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 1.4% since reporting. It currently trades at $121.99.
Is now the time to buy Expeditors? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: 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 $21.58 billion, flat year on year, falling short of analysts’ expectations by 1.5%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 1.1% since the results and currently trades at $303.85.
Read our full analysis of FedEx’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 $22.25 billion, up 5.6% year on year. This print topped analysts’ expectations by 0.5%. It was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates.
United Parcel Service achieved the highest full-year guidance raise among its peers. The stock is up 3.1% since reporting and currently trades at $135.40.
Read our full, actionable report on United Parcel Service here, it’s free.
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 $3.16 billion, up 27.8% year on year. This result topped analysts’ expectations by 5.3%. Zooming out, it was a slower quarter as it logged revenue guidance for next quarter missing analysts’ expectations.
The stock is up 2.9% since reporting and currently trades at $60.35.
Read our full, actionable report on GXO Logistics here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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