A month has gone by since the last earnings report for C.H. Robinson Worldwide, Inc. (CHRW - Free Report) . Shares have lost about 3% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is CHRW due for a breakout? 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 catalysts.
C.H. Robinson Worldwide’s 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. Total revenues rose 14.9% year over year to $3,925.3 million, surpassing the Zacks Consensus Estimate of $3,808.8 million.
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.
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.
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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been six revisions lower for the current quarter.
At this time, CHRW has a great Growth Score of A, though it is lagging a lot on the momentum front with an F. The stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, CHRW has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.