Rebound in Asian cargo buoys U.S. shippers
January 31, 2013 Category Airlines and airports, Logistics
A pickup in air cargo shipments from Asia may benefit shares of Expeditors International and FedEx as global economic growth improves. Exports at Hong Kong Air Cargo Terminals (HACTL) grew 5.9% in December from a year earlier, following an 8.5% increase in November, based on data from the biggest handler in the world’s busiest freight airport. The recent gains came after shipments had contracted by an average 4.2% in the 24 months to October. The rise in shipments from Asia was encouraging for Expeditors, with 2011 revenue of USD2.9 billion from airfreight services, and FedEx, said David Ross, Transport Analyst at Stifel Nicolaus. These exports – particularly high-technology shipments – were “part of the equation” that boosted earnings for those companies. While Expeditors had missed analysts’ earnings estimates for the past four quarters, it might be “nearing a beatable quarter” this year, he said. The company is scheduled to report fourth-quarter results on February 26. Exports from Hong Kong Air Cargo Terminals have a “strong correlation” with annual growth in airfreight revenue at Expeditors and yearly gains in the average daily weight of FedEx’s international priority freight, according to Peter Nesvold, Analyst in New York at Jefferies & Co.
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