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Can C.H. Robinson (CHRW) Q2 Earnings Spring a Surprise?

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C.H. Robinson Worldwide (CHRW - Free Report) is set to release second-quarter 2016 financial results after the market closes on Jul 26.

Last quarter, the company posted a positive earnings surprise of 2.47%. Also, the company’s earnings surpassed the Zacks Consensus Estimate in all of the last four quarters, with an average beat of 3.73%. Let’s see how things are shaping up for this announcement.

Factors at Play

C.H Robinson is poised to benefit from the rise in demand from third-party logistics providers (3PL). It is one of the best rated 3PL service providers with a strong focus on expansion with its go-to-market strategies. The company is also positioned to gain from its investments in addition to synergies from acquisitions made over the past few years.  

However, the company might get impacted by the decline in intermodal volumes, especially due to a challenging truck market. A rise in expenses in the Less-than Truckload segment may have an adverse impact on earnings. The company is also expected to maintain a cautious stance in European operations due to the Brexit vote. This is expected from most logistic players like FedEx Corporation (FDX - Free Report) . Another pressing concern for the company is its high debt level. It is to be seen how the company performs this quarter.

CH ROBINSON WWD Price and EPS Surprise


Earnings Whispers

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

Zacks ESP: The Earnings ESP for the company currently stands at 0.00%. This is because both the Most Accurate estimate and Zacks Consensus Estimate are pegged at $1.00.

Zacks Rank: C.H. Robinson carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

Please note that we caution against Sell-rated stocks (#4 or 5) going into an earnings announcement.

Stocks to Consider

Here are some companies you may want to consider instead, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

CBS Corp (CBS - Free Report) has an earnings ESP of +1.16% and a Zacks Rank #2.

LATAM Airlines Group SA   has an Earnings ESP of over 100% and a Zacks Rank #2.

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C.H. Robinson Worldwide, Inc. (CHRW) - free report >>

CBS Corporation (CBS) - free report >>

FedEx Corporation (FDX) - free report >>