C.H. Robinson Outperforms

C.H. Robinson Worldwide Inc. (CHRW - Analyst Report) reported third quarter 2009 net income applicable to common shareholders of $95.5 million or 57 cents per share compared to $93.6 million or 54 cents per share in the prior-year quarter. Results were two pennies ahead of the Zacks Consensus Estimate of 55 cents. Results were aided by higher revenue from sourcing and trucking segments.

Consolidated total revenue decreased 15.6% year-over-year to $2.0 billion, primarily due to 30.1% and 21.9% declines in the Intermodal and Ocean revenues, respectively. Total Transportation revenue declined of 0.2% to $309.8 million, primarily driven by falling market demand, reduced transportation rates and volume declines in various modes of transportation. However, transportation net revenue margin increased to 19.8% in 2009 from 15.9% in 2008 largely driven by a decline in fuel prices and a lower cost of capacity.

Sourcing revenues increased 9.3% to $30.9 million, primarily due to volume growth and the acquisition of Rosemont Farms Corporation, Inc. Information Services revenues declined 8.5% driven by lower fuel prices and declines in transactions.

Truck net revenues, which consist of truckload and less-than-truckload services, increased 2.1% aided by increased margins due to lower fuel prices and lower cost of capacity.

Operating expenses decreased 2.6% to $197.8 million compared to $203.0 million in the prior-year quarter due to decrease in personnel expenses, other selling, general, and administrative expenses. As a percentage of net revenues, total operating expenses decreased slightly to 56.1% in the reported versus 57.7% in the prior-year quarter.

On Sept. 14, 2009, the company acquired certain assets of Rosemont Farms Corporation, Inc., a produce marketing company, and its sister company Quality Logistics, LLC, a non-asset based transportation provider that focuses on produce transportation.

During the third quarter of 2009, the Board of Directors authorized management to repurchase an additional 10,000,000 shares over a number of years. During the reported quarter, the company repurchased 10 million shares under the 2007 authorization. There are approximately 2.7 million shares remaining under the 2007 authorization.

C.H. Robinson Worldwide, Inc. operates as a third party logistics company. It provides freight transportation services and logistics solutions to companies in various industries, serving over 32,000 customers through a network of 235 offices in North America, South America, Europe, Asia, Australia and the Middle East. C.H. Robinson maintains one of the largest networks of motor carrier capacity in North America and works with over 50,000 transportation providers worldwide.

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