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C.H. Robinson (CHRW) Up 3.2% 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 3.2% 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 its most recent earnings report in order to get a better handle on the important drivers.

C.H. Robinson's Q3 Earnings & Revenues Beat Estimates

C.H. Robinson's third-quarter 2018 earnings per share of $1.25 beat the Zacks Consensus Estimate of $1.17. Moreover, the bottom line surged 47.1% year over year on higher revenues and lower tax rate.

Total revenues rose 13.4% year over year to $4,291.9 million, surpassing the Zacks Consensus Estimate of $4,276.5 million. The top line was boosted by growth across all transportation service lines. Effective tax rate in the quarter under view reduced to 26.5% from 35.2% a year ago owing to the Tax Cuts and Jobs Act of 2017.

Total operating expenses increased 12.2% year over year to $448.1 million. However, operating ratio (operating expenses as a percentage of net revenues) of 64.6% compared favorably with 67.3% in the year-ago period.

During the quarter under review, the company returned $150.8 million to shareholders through a combination of dividends ($64.6 million) and share repurchases ($86.2 million), reflecting an increase of 18.7% year over year.

Segmental Results

Total revenues at North American Surface Transportation (NAST) were $2.93 billion (up 18.7%) in the third quarter while the same at Global Forwarding totaled $639.27 million (up 15.8%). At Robinson Fresh, the metric logged $565.59 million (down 7.8%) 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 $668.87 million in the quarter under consideration, up 18.6% from the prior-year period’s figure.

Truckload net revenues grew 25.8% year over year to $378.57 million. Additionally, net revenues at Less-than-Truckload improved 20.4% year over year to $122.62 million.

Net revenues at the Intermodal segment increased 11.8% year over year to $8.36 million.

Net revenues at the Ocean transportation segment declined 7.8% year over year to $74.84 million. The same at the Air transportation division rose 17.5% year over year to $29.99 million. Customs net revenues jumped 33.8% to $23.31 million.

Net revenues at Other logistics services climbed 5.4% year over year to $31.19 million.

Sourcing: Net revenues at the segment dropped 15.4% year over year to approximately $25.17 million.

Liquidity

The company exited the third quarter with cash and cash equivalents of $297.8 million compared with $333.89 million at the end of 2017. Long-term debt was $1,341.3 million compared with $750 million at 2017 end.

2018 Outlook Intact

The company’s full-year effective tax rate projection remains unaltered at 24-25%. Additionally, it reiterates capital expenditures in the range of $60-$70 million for 2018 with the majority spending on technology.

Liquidity
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?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

Currently, C.H. Robinson has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly 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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