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C.H. Robinson (CHRW) Q1 Earnings & Revenues Beat, Rise Y/Y

Zacks Equity Research
Updated

C.H. Robinson Worldwide Inc.’s CHRW first-quarter 2018 earnings per share of $1.01 beat the Zacks Consensus Estimate of 99 cents. Moreover, the bottom line improved 17.4% year over year on higher revenues and lower tax rate

Total revenues rose 14.9% year over year to $3,925.3 million, surpassing the Zacks Consensus Estimate of $3,808.8 million.

Effective tax rate in the quarter reduced to 21.3% from 31.7% a year-ago, owing to the new tax law (Tax Cuts and Jobs Act of 2017).

Total operating expenses increased 14.1% year over year to $434.3 million, resulting in an operating ratio (operating expenses as a percentage of net revenues) of 69.4% compared with 66.6% in the year-ago quarter.

During the quarter, the company returned $134.7 million to shareholders through a combination of dividends and share repurchases.

Segmental Results

Total revenues at North American Surface Transportation (NAST) were $2,663.01 million in the reported quarter (up 17.9%) while the same at Global Forwarding totaled $553.75 million (up 18.1%) and at Robinson Fresh, the metric logged $550.47 million, flat year over year.

A historical presentation of results on an enterprise basis is given below:

Transportation: The unit (comprising Truckload, Intermodal, Less-than-Truckload, Ocean, Air, Customs and Other logistics services) posted net revenues of $596.04 million in the quarter under review, up 10.8% from the prior-year period.

Truckload net revenues grew 8.6% year over year to $330.29 million. Additionally, net revenues at Less-than-Truckload rose 14.9% year over year to $112.14 million.

Net revenues at the Intermodal segment declined 15.5% year over year to $6.33 million due to high costs.

Net revenues at the Ocean transportation segment improved 9.5% year over year to $68.84 million. The same at the Air transportation division surged 32.4% year over year to $28.88 million. Customs net revenues jumped 28.5% to $20.65 million.

Net revenues at Other logistics services increased 2.6% year over year to $28.89 million.

Sourcing: Net revenues at the segment dipped 1.7% year over year to approximately $29.89 million.

C.H. Robinson Worldwide, Inc. Price, Consensus and EPS Surprise

 

C.H. Robinson Worldwide, Inc. Price, Consensus and EPS Surprise | C.H. Robinson Worldwide, Inc. Quote

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Liquidity

The company exited the first quarter with cash and cash equivalents of $349.78 million compared with $333.89 million at the end of 2017. Long-term debt was $750 million, unchanged from that in 2017-end.

Outlook

Demand is expected to be consistently high owing to the benefits of a strengthened economy post the U.S. tax reform. However, dearth of drivers and other factors are expected to put a constraint on capacity. Given this backdrop, the company expects freight market strength to drive growth throughout the year. The company continues to expect capital expenditures in the range of $60-$70 million for the current year.

Zacks Rank & Key Picks

C.H. Robinson carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc. SKYW, Cathay Pacific Airways Ltd. CPCAY and Gol Linhas Aereas Inteligentes S.A. GOL. While SkyWest sports a Zacks Rank #1 (Strong Buy), Cathay Pacific Airways and Gol Linhas hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest, Cathay Pacific Airways and Gol Linhas have rallied more than 59%, 12% and 60%, respectively, in a year.

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