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C.H. Robinson Worldwide Inc. (CHRW - Analyst Report) reported first quarter 2013 earnings per share of 64 cents, missing the Zacks Consensus Estimate by 5 cents. The results inched down 1.5% from 65 cents in the year-ago quarter.

The performance of the company was hurt by margin contraction, slacked growth, and steeper selling and general expenses.

Total revenue in the first quarter escalated 17.3% year over year to $2.99 billion, surpassing the Zacks Consensus Estimate of $2.97 billion, supported by strong contributions from some business segments.

Total operating expenses rose 17.1% year over year to $287.0 million in the first quarter, resulting in an operating ratio (operating expenses as a percentage of net revenue) of 63% versus 59.1% in the year-earlier quarter.

Segment Details

Transportation: The segment (comprising Truck, Intermodal, Ocean, Air and Other logistics services) reported net revenue of $421.3 million in the first quarter, up 14.7% year over year.

Net revenue from Truck (comprising truckload and less-than-truckload services) increased 3.7% to $327.1 million in the reported quarter, attributable to volume growth from the acquisition of Apreo Logistics S.A. in Oct 2012 as well as increased shipments, partially offset by high cost rate.

Net revenue from Intermodal fell 6.3% year over year to $9.1 million due to lower net revenue margin, which was affected by increased cost of capacity.

Net revenue from Ocean soared 169.6% to $42.5 million, while that of Air transportation grew 89.0% year over year to $16.8 million, both aided by Phoenix operations acquired in November last year.

Net revenue from other logistics services registered 22.3% year-over-year growth to $17.2 million on the back of more transactions related to management services.

Sourcing: The segment’s net revenue dropped slightly 0.3% year over year to $31.8 million, primarily on low net revenue margin.

Payment Services: The segment’s (comprising income from subsidiary, T-Chek Systems Inc.) net revenue declined 83.2% year over year to $2.6 million in the first quarter, as a result of divesture in T-Chek system.

Liquidity & Debt Position

C.H. Robinson ended the quarter with cash and cash equivalents of $159.9 million against $210.0 million as of Dec 31, 2013. The company utilized $8.7 million for the capital expenditure.

Other Stocks

Another logistic company, Expeditors International of Washington Inc. (EXPD - Analyst Report), reported first quarter 2013 adjusted earnings of 39 cents per share, at par with the Zacks Consensus Estimate. The quarter figure increased 8% from 36 cents.

Other stock worth considering in this sector include Pacer International Inc. that have a Zacks Rank #2 (Buy).

Our Analysis

Although we remain optimistic on the company’s ability to achieve its long-term growth goal, we believe that the competitive freight market, declining truckload market share, and limited margin expansion opportunities could restrict near-term growth. However, the company’s flexible business structure and efficient cost control measures along with revenue growth from strong pricing will prove beneficial in the near future.

C.H. Robinson – which operates with other freight carriers such as United Parcel Service Inc. (UPS - Analyst Report) – has Zacks Rank #3 (Hold).

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