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Why Is C.H. Robinson (CHRW) Down 2.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for C.H. Robinson Worldwide (CHRW - Free Report) . Shares have lost about 2.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is C.H. Robinson 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 drivers.
Earnings Miss at C.H. Robinson in Q4
C.H. Robinson's fourth-quarter 2019 The company’s earnings of 73 cents per share missed the Zacks Consensus Estimate of 98 cents. The bottom line also plunged 45.5% year over year. Results were hurt by the weak freight environment.
Total revenues came in at $3,793.3 million, falling short of the Zacks Consensus Estimate of $3804.8 million. Moreover, the top line fell 8.3% year over year. This downturn can be attributed to unfavorable pricing across most transportation service lines.
Total operating expenses decreased 3.5% year over year to $442.06 million, primarily due to 11.9% decline in Personnel expenses. However, operating ratio (operating expenses as a percentage of net revenues) deteriorated to 76.4% from 64.2% in the year-ago quarter. Notably, lower the value of the metric the better.
The company returned $137.3 million to its shareholders through a combination of cash dividends ($69.9 million) and share repurchases ($67.4 million). Capital expenditures totaled $19.5 million in the quarter under review.
Segmental Results
At North American Surface Transportation (NAST), total revenues were $2,788.55 million (down 8.6%) in the fourth quarter. This downside was due to weak pricing. Net revenues at the segment also dropped 23.2%. NAST results include those of Robinson Fresh transportation, which were previously reported under a separate segment.
Total revenues at Global Forwarding summed $600.17 million, down 11.4%. Low pricing and contraction in volumes at the ocean and air units affected results. Net revenues at the segment also declined 9.6% despite The Space Cargo Group acquisition boosting results by 3 percentage points.
A historical presentation of the results on an enterprise basis is given below:
Transportation: The unit (comprising Truckload, Intermodal, Less-than-Truckload, Ocean, Air, Customs and Other logistics services) delivered net revenues of $557.21 million in the quarter under consideration, down 19.1% from the prior-year figure.
Truckload net revenues declined 28.8% year over year to $281.54 million with volumes remaining flat year over year. Net revenues at Less-than-Truckload (LTL) also dipped 3.2% year over year to $113.61 million. However, LTL volumes grew 4.5% in the quarter.
At the Intermodal segment, net revenues declined 4.8% year over year to $8.19 million as volumes fell 16%. Net revenues at the Ocean transportation segment decreased 10.6% year over year to $73.48 million. The same at the air transportation segment dropped 15.7% year over year to $25.94 million. Customs net revenues also slid 3.5% to $22.93 million.
However, Other logistics services’ net revenues inched up 3% year over year to $31.52 million.
Sourcing: Net revenues at the segment dropped 13% to $21.66 million.
Liquidity
The company exited the fourth quarter with cash and cash equivalents of $447.86 million compared with $378.62 million at the end of 2018. Long-term debt was $1,092.45 million compared with $1,341.35 million at 2018 end.
Outlook
For 2020, capital expenditures are anticipated in the $60-$70 million range with majority to be invested in technology. The company will try to ramp up productivity and increase levels of automation through the investments in technology. Over the next three years, it aims to reduce operating expenses by $100 million across the enterprise. Meanwhile, headwinds pertaining to net revenue per load are anticipated to persist through the first half of 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?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -21% due to these changes.
VGM Scores
Currently, C.H. Robinson has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise C.H. Robinson has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is C.H. Robinson (CHRW) Down 2.4% Since Last Earnings Report?
A month has gone by since the last earnings report for C.H. Robinson Worldwide (CHRW - Free Report) . Shares have lost about 2.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is C.H. Robinson 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 drivers.
Earnings Miss at C.H. Robinson in Q4
C.H. Robinson's fourth-quarter 2019 The company’s earnings of 73 cents per share missed the Zacks Consensus Estimate of 98 cents. The bottom line also plunged 45.5% year over year. Results were hurt by the weak freight environment.
Total revenues came in at $3,793.3 million, falling short of the Zacks Consensus Estimate of $3804.8 million. Moreover, the top line fell 8.3% year over year. This downturn can be attributed to unfavorable pricing across most transportation service lines.
Total operating expenses decreased 3.5% year over year to $442.06 million, primarily due to 11.9% decline in Personnel expenses. However, operating ratio (operating expenses as a percentage of net revenues) deteriorated to 76.4% from 64.2% in the year-ago quarter. Notably, lower the value of the metric the better.
The company returned $137.3 million to its shareholders through a combination of cash dividends ($69.9 million) and share repurchases ($67.4 million). Capital expenditures totaled $19.5 million in the quarter under review.
Segmental Results
At North American Surface Transportation (NAST), total revenues were $2,788.55 million (down 8.6%) in the fourth quarter. This downside was due to weak pricing. Net revenues at the segment also dropped 23.2%. NAST results include those of Robinson Fresh transportation, which were previously reported under a separate segment.
Total revenues at Global Forwarding summed $600.17 million, down 11.4%. Low pricing and contraction in volumes at the ocean and air units affected results. Net revenues at the segment also declined 9.6% despite The Space Cargo Group acquisition boosting results by 3 percentage points.
A historical presentation of the results on an enterprise basis is given below:
Transportation: The unit (comprising Truckload, Intermodal, Less-than-Truckload, Ocean, Air, Customs and Other logistics services) delivered net revenues of $557.21 million in the quarter under consideration, down 19.1% from the prior-year figure.
Truckload net revenues declined 28.8% year over year to $281.54 million with volumes remaining flat year over year. Net revenues at Less-than-Truckload (LTL) also dipped 3.2% year over year to $113.61 million. However, LTL volumes grew 4.5% in the quarter.
At the Intermodal segment, net revenues declined 4.8% year over year to $8.19 million as volumes fell 16%. Net revenues at the Ocean transportation segment decreased 10.6% year over year to $73.48 million. The same at the air transportation segment dropped 15.7% year over year to $25.94 million. Customs net revenues also slid 3.5% to $22.93 million.
However, Other logistics services’ net revenues inched up 3% year over year to $31.52 million.
Sourcing: Net revenues at the segment dropped 13% to $21.66 million.
Liquidity
The company exited the fourth quarter with cash and cash equivalents of $447.86 million compared with $378.62 million at the end of 2018. Long-term debt was $1,092.45 million compared with $1,341.35 million at 2018 end.
Outlook
For 2020, capital expenditures are anticipated in the $60-$70 million range with majority to be invested in technology. The company will try to ramp up productivity and increase levels of automation through the investments in technology. Over the next three years, it aims to reduce operating expenses by $100 million across the enterprise. Meanwhile, headwinds pertaining to net revenue per load are anticipated to persist through the first half of 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -21% due to these changes.
VGM Scores
Currently, C.H. Robinson has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise C.H. Robinson has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.