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Is a Beat Likely for C.H. Robinson (CHRW) in Q1 Earnings?

Zacks Equity Research

C.H. Robinson Worldwide, Inc. CHRW is scheduled to report first-quarter 2019 results on Apr 30, after the market closes.

Last reported quarter, the company delivered a positive surprise of 11.7%. Moreover, the bottom line improved substantially year over year. Although the top line rose year over year, it missed the Zacks Consensus Estimate. Growth across all transportation service lines aided results. Notably, the company flaunts an impressive earnings history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the  average being 6.8%.

The company’s earnings picture for the first quarter also seems rosy with the Zacks Consensus Estimate for earnings being revised 2 cents upward in the last 90 days.

Why a Likely Positive Surprise?

Our  proven model shows that C.H. Robinson is likely to beat on earnings in the first quarter, courtesy of a perfect combination of the following two key ingredients:

Earnings ESP: C.H. Robinson has an Earnings ESP of +1.18% as the Most Accurate Estimate is pegged at $1.14, higher than the Zacks Consensus Estimate of $1.13. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: C.H. Robinson carries a Zacks Rank #3 (Hold). Notably, stocks with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 and a positive ESP have significantly higher chances of beating estimates.Thus, this same combination predicts a likely positive surprise for the stock this earnings season.

Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

C.H. Robinson Worldwide, Inc. Price and EPS Surprise

 

C.H. Robinson Worldwide, Inc. Price and EPS Surprise | C.H. Robinson Worldwide, Inc. Quote


Factors Likely at Play

C.H. Robinson’s The Space Cargo Group buyout completed in March is anticipated to drive results in the first quarter. Rapid e-commerce growth is the key catalyst behind the growth of the company’s Global Forwarding unit of which The Space Cargo Group products is a part.

Similar to the last few quarters, the company’s operating ratio (operating expenses as a percentage of revenues) is expected to improve in the first quarter as well and aid its bottom-line growth in the process. A lower value of this key metric bodes well for the company.

Additionally, strong revenues at the company’s Global Forwarding segment should boost its top line. The Zacks Consensus Estimate for first-quarter revenues at the Global Forwarding segment stands at $598 million, higher than $563 million reported in the year-ago quarter.
 
However, this positivity might be partly offset by high operating expenses and capital expenditures that could put pressure on the bottom line.

Other Stocks to Consider

Investors interested in the broader Transportation sector may also consider Ship Finance International Limited SFL, ArcBest Corporation ARCB and Kirby Corporation KEX as these stocks too possess the right combination of elements to beat on earnings in the upcomingquarterly releases.

Ship Finance has an Earnings ESP of +7.69% and a Zacks Rank of 3.

ArcBest is a #3 ranked player and has an Earnings ESP of +3.33%. The company will report first-quarter earnings numbers on May 2.

Kirby carries a Zacks Rank #2 and an Earnings ESP of +1.67%. This company will announce first-quarter earnings numbers on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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