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C.H. Robinson (CHRW) Up 4% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for C.H. Robinson Worldwide (CHRW - Free Report) . Shares have added about 4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is C.H. Robinson due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Earnings Beat at C.H. Robinson in Q1

C.H. Robinson’s first-quarter 2021 earnings of $1.28 per share surpassed the Zacks Consensus Estimate of 97 cents. Moreover, the bottom line surged more than 100% year over year.

Total revenues of $4,803.9 million not only outperformed the Zacks Consensus Estimate of $4365.4 million but also increased 26.3% year over year owing to higher pricing and increased volumes across most of the company’s service lines, thanks to improvement in freight environment.

Total operating expenses increased 4.5% year over year to $479.1 million due to higher personnel expenses. Adjusted gross profit climbed 23.7% year over year to $702.38 million, primarily owing to higher pricing at the truckload, ocean and air service lines, increased volumes in ocean, less than truckload ("LTL") and air service lines, as well as contributions from the Prime Distribution Services acquisition.

The company returned $220.9 million to its shareholders in the first quarter through a combination of cash dividends ($70 million) and share repurchases ($150.9 million). Capital expenditure totaled $13.5 million in the quarter under review. The company continues to expect capital expenditure in the band of $55 million-$65 million for 2021. Majority of the amount will be used on technology spends.

Segmental Results

At North American Surface Transportation (“NAST”), total revenues were $3.21 billion (up 13.7%) in the first quarter. Segmental revenues increased due to higher truckload pricing and increase in LTL shipments. Adjusted gross profit at the segment ascended 13% with a three-percentage-point benefit from the Prime acquisition in March 2020. NAST results include Robinson Fresh transportation, which was previously reported under a separate segment.

Total revenues at Global Forwarding were $1.16 billion, up more than 100% year over year. Higher pricing and volumes at ocean and air service lines, owing to increased freight demand, boosted results. Adjusted gross profit at the segment surged 67% year over year.

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

Transportation: The unit (comprising Truckload, Intermodal, LTL, Ocean, Air, Customs and Other logistics services) delivered adjusted gross profit of $678.94 million in the quarter under consideration, up 25.3% from the prior-year figure.

Adjusted gross profit at the Truckload segment climbed 13.2% year over year to $300.02 million. Volumes declined 6.5% year over year. LTL adjusted gross profit increased 6.7% year over year to $121.55 million with volumes increasing 15% in the quarter.

Adjusted gross profit at the Ocean transportation segment jumped 93.9% year over year to $135.51 million. The same at the air transportation segment surged 62% to $45.89 million. Meanwhile, customs-adjusted gross profit augmented 14.3% to $24.22 million.

Other logistics services’ adjusted gross profit rose 18.3% to $51.74 million.

Sourcing: Adjusted gross profit at the segment declined 9.7% to $23.44 million.

Liquidity

This company exited the first quarter with cash and cash equivalents of $217.61 million compared with $243.80 million at the end of December 2020. Long-term debt was $1.09 billion, flat compared with December 2020.

Sourcing: Net revenue at the segment increased 3.9% year over year to $30.41 million.
Liquidity
Sourcing: Net revenue at the segment increased 3.9% year over year to $30.41 million.
Liquidity
Below we give a historical presentation of results on an enterprise basis.
Transportation: The unit (comprising Truckload, Intermodal, Less-than-Truckload, Ocean, Air, Customs and Other logistics services) reported net revenue of $538.1 million in the first quarter of 2017, up 0.8% from the year-ago quarter.
Below we give a historical presentation of results on an enterprise basis.
Transportation: The unit (comprising Truckload, Intermodal, Less-than-Truckload, Ocean, Air, Customs and Other logistics services) reported net revenue of $538.1 million in the first quarter of 2017, up 0.8% from the year-ago quarter.
Below we give a historical presentation of results on an enterprise basis.
Transportation: The unit (comprising Truckload, Intermodal, Less-than-Truckload, Ocean, Air, Customs and Other logistics services) reported net revenue of $538.1 million in the first quarter of 2017, up 0.8% from the year-ago quarter.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 13.35% due to these changes.

VGM Scores

At this time, C.H. Robinson has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise C.H. Robinson has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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