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C.H. Robinson (CHRW) Q4 Earnings: What's in the Offing?

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C.H. Robinson Worldwide Inc. (CHRW - Free Report) is slated to release fourth-quarter 2017 results on Jan 30 after the market closes.

Last quarter, the company delivered a positive earnings surprise of 3.7% with better-than-expected earnings and revenues. However, the bottom line decreased 5.6% year over year due to higher costs and a lackluster performance of the truckload and intermodal divisions. Total revenues rose 12.8% owing to volume growth across all transportation services of the company.

Let’s see, how things shape up for this earnings season.

Factors at Play

The company is struggling with rising costs. High costs are expected to hurt the company's bottom line in the fourth-quarter as was the case in the third quarter of 2017.

Further, sluggish growth at the truckload and intermodal divisions may hamper results in the yet-to-be-reported quarter. The Zacks Consensus Estimate for intermodal (part of the transportation sector) revenues stands at $7.46 million, below $7.52 million a year ago.

Additionally, the company’s high-debt levels may affect results in the quarter.

However, the company’s efforts to reward shareholders through dividends and share buy backs are impressive. In December 2017, the board of directors of the company approved a 2.2% hike in its quarterly cash dividend to 46 cents per share (or $1.84 annually).

Earnings Whispers

Our proven model does not conclusively show that C.H. Robinson is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.

Zacks ESP: C.H. Robinson has an Earnings ESP of -1.01% as the Most Accurate estimate stands at 84 cents per share while the Zacks Consensus Estimate is pegged at 85 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: C.H. Robinson carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company needs a positive ESP to be confident about an earnings surprise. Hence, this combination leaves surprise prediction inconclusive.

Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.


Stocks to Consider

Investors interested in the broader Transportation sector may consider Allegiant Travel Company (ALGT - Free Report) , SkyWest, Inc. (SKYW - Free Report) and Atlas Air Worldwide Holdings stocks as these possess the right combination of elements to beat on earnings in their next releases this time around.

Allegiant has an Earnings ESP of +1.09% and a Zacks Rank of 3. The company will release fourth-quarter earnings numbers on Jan 31.

SkyWest has an Earnings ESP of +7.80% and a Zacks Rank of 1. The company is scheduled to report fourth-quarter results on Feb 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Atlas Air Worldwide has an Earnings ESP of +2.16% and is a Zacks #3 Ranked player. The company is expected to announce fourth-quarter results on Feb 22.

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