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C.H. Robinson (CHRW) Q2 Earnings In Line, Revenues Lag Estimates
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C.H. Robinson Worldwide, Inc. (CHRW - Free Report) second-quarter 2023 earnings per share (EPS) of 90 cents came in line with the Zacks Consensus Estimate and declined 66.2% year over year. Total revenues of $4421.9 million lagged the Zacks Consensus Estimate of $4646.5 million and declined 35% year over year due to lower pricing in the company’s ocean and truckload services.
Quarterly results were impacted by soft freight markets globally. Weak demand, high inventories and excess capacity led to a more competitive marketplace and subdued transportation rates.
Operating expenses declined 5.2% year over year to $532.9 million in the second quarter. Adjusted gross profit fell 35.5% year over year to $665.5 million, owing to lower adjusted gross profit per transaction in truckload and ocean. Adjusted operating margin of 19.9% declined 2,560 basis points.
C.H. Robinson Worldwide, Inc. Price, Consensus and EPS Surprise
North American Surface Transportation’s total revenues were $3,079.26 million (down 25.7% year over year) in the second quarter, owing to lower truckload pricing. Adjusted gross profit of the segment declined 35.9% to $400.5 million.
Total revenues from Global Forwarding fell 62.7% to $779.9 million, owing to lower pricing in CHRW’s ocean service. Adjusted gross profit of the segment fell 44.8% year over yearto $179.2 million.
Revenues from other sources (Robinson Fresh, Managed Services and Other Surface Transportation) increased 0.8% to $562.72 million.
Below we present the division of adjusted profit among the service lines (on an enterprise basis).
Transportation: The unit (comprising Truckload, LTL, Ocean, Air, Customs and Other logistics services) delivered an adjusted gross profit of $631.26million in the quarter under review, down 36.8% from the prior-year figure.
Adjusted gross profits of Truckload, LTL and Customs declined 42.8%, 18.5% and 9.7% year over year to $261.14 million, $137.18 million and $25.12 million, respectively. However, other logistics services’ adjusted gross profit rose 8.2% to $66.58 million.
Adjusted gross profit of the Ocean transportation segment fell 52.8% year over year. The metric fell 40.7% to $33.72 million in the Air transportation sub-group.
Balance-Sheet Data
CHRW exited the second quarter with cash and cash equivalents of $210.15 million compared with $239.16 million as of Mar 31, 2023. Long-term debt was $920.49 million compared with $920.27 million at the first-quarter end.
CHRW generated $224.8 million of cash from operations in the second quarter. Capital expenditures were $24.4 million in the reported quarter.
In the second quarter of 2023, CHRW repurchased shares worth $33.4million and paid $72.8 million in cash dividends.
2023 Outlook
Capital expenditures for 2023 are anticipated to be between $90 million and $100 million. The full-year effective tax rate is now projected to be in the range of 16-18% (prior view: 19-21%).
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.
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C.H. Robinson (CHRW) Q2 Earnings In Line, Revenues Lag Estimates
C.H. Robinson Worldwide, Inc. (CHRW - Free Report) second-quarter 2023 earnings per share (EPS) of 90 cents came in line with the Zacks Consensus Estimate and declined 66.2% year over year. Total revenues of $4421.9 million lagged the Zacks Consensus Estimate of $4646.5 million and declined 35% year over year due to lower pricing in the company’s ocean and truckload services.
Quarterly results were impacted by soft freight markets globally. Weak demand, high inventories and excess capacity led to a more competitive marketplace and subdued transportation rates.
Operating expenses declined 5.2% year over year to $532.9 million in the second quarter. Adjusted gross profit fell 35.5% year over year to $665.5 million, owing to lower adjusted gross profit per transaction in truckload and ocean. Adjusted operating margin of 19.9% declined 2,560 basis points.
C.H. Robinson Worldwide, Inc. Price, Consensus and EPS Surprise
C.H. Robinson Worldwide, Inc. price-consensus-eps-surprise-chart | C.H. Robinson Worldwide, Inc. Quote
Segmental Results
North American Surface Transportation’s total revenues were $3,079.26 million (down 25.7% year over year) in the second quarter, owing to lower truckload pricing. Adjusted gross profit of the segment declined 35.9% to $400.5 million.
Total revenues from Global Forwarding fell 62.7% to $779.9 million, owing to lower pricing in CHRW’s ocean service. Adjusted gross profit of the segment fell 44.8% year over yearto $179.2 million.
Revenues from other sources (Robinson Fresh, Managed Services and Other Surface Transportation) increased 0.8% to $562.72 million.
Below we present the division of adjusted profit among the service lines (on an enterprise basis).
Transportation: The unit (comprising Truckload, LTL, Ocean, Air, Customs and Other logistics services) delivered an adjusted gross profit of $631.26million in the quarter under review, down 36.8% from the prior-year figure.
Adjusted gross profits of Truckload, LTL and Customs declined 42.8%, 18.5% and 9.7% year over year to $261.14 million, $137.18 million and $25.12 million, respectively. However, other logistics services’ adjusted gross profit rose 8.2% to $66.58 million.
Adjusted gross profit of the Ocean transportation segment fell 52.8% year over year. The metric fell 40.7% to $33.72 million in the Air transportation sub-group.
Balance-Sheet Data
CHRW exited the second quarter with cash and cash equivalents of $210.15 million compared with $239.16 million as of Mar 31, 2023. Long-term debt was $920.49 million compared with $920.27 million at the first-quarter end.
CHRW generated $224.8 million of cash from operations in the second quarter. Capital expenditures were $24.4 million in the reported quarter.
In the second quarter of 2023, CHRW repurchased shares worth $33.4million and paid $72.8 million in cash dividends.
2023 Outlook
Capital expenditures for 2023 are anticipated to be between $90 million and $100 million. The full-year effective tax rate is now projected to be in the range of 16-18% (prior view: 19-21%).
Currently, C.H. Robinson carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.