C.H. Robinson Worldwide Inc.’s (CHRW - Free Report) 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.
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 - Free Report) , Cathay Pacific Airways Ltd. (CPCAY - Free Report) and Gol Linhas Aereas Inteligentes S.A. . 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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C.H. Robinson Worldwide Inc.’s (CHRW - Free Report) 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.
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 - Free Report) , Cathay Pacific Airways Ltd. (CPCAY - Free Report) and Gol Linhas Aereas Inteligentes S.A. . 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.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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