The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how air freight and logistics stocks fared in Q3, starting with Hub Group (NASDAQ:HUBG).
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 0.7% below.
Thankfully, share prices of the companies have been resilient as they are up 5.7% on average since the latest earnings results.
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. This print exceeded analysts’ expectations by 0.7%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ sales volume estimates.
“During the third quarter, Hub Group continued to navigate softer demand across freight markets. Intermodal profitability and revenue per load increased sequentially and from prior year. The Logistics operating margin also improved, and Hub Group started onboarding recent Final Mile awards. Our continuous improvement approach to expense management helped offset the impact of lower revenue. The recent addition of Marten Intermodal accelerates the momentum of our refrigerated intermodal business, and our strong balance sheet and free cash flow generation provide significant capital flexibility. We remain focused on serving customers and realizing the intermodal growth potential for Hub Group in collaboration with our rail partners Union Pacific and Norfolk Southern. Hub Group is well positioned to deliver accelerating growth and further improvement in margin performance,” said Phil Yeager, Hub Group’s President, Chief Executive Officer and Vice Chairman.
Unsurprisingly, the stock is down 2% since reporting and currently trades at $34.75.
Read our full report on Hub Group 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 scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 14.1% since reporting. It currently trades at $139.72.
Is now the time to buy Expeditors? Access our full analysis of the earnings results here, it’s free for active Edge members.
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, in line with analysts’ expectations. It was a mixed quarter as it posted a solid beat of analysts’ adjusted operating income estimates but revenue guidance for next quarter missing analysts’ expectations.
As expected, the stock is down 15.1% since the results and currently trades at $47.
Read our full analysis of GXO Logistics’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 print beat analysts’ expectations by 2.5%. Overall, it was an exceptional quarter as it also logged a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 3.7% since reporting and currently trades at $92.64.
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 surpassed analysts’ expectations by 2.7%. It was a strong quarter as it also put up a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ revenue estimates.
The stock is up 16.8% since reporting and currently trades at $265.05.
Read our full, actionable report on FedEx here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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