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C.H. Robinson (CHRW) Q4 Earnings Top, Revenues Lag Estimates

Zacks Equity Research

C.H. Robinson Worldwide, Inc.’s CHRW fourth-quarter 2018 earnings per share of $1.34 beat the Zacks Consensus Estimate of $1.20. The bottom line also improved substantially year over year.

Total revenues of $4,137.9 million fell short of the Zacks Consensus Estimate of $4,237.4 million. However, the top line rose 4.5% year over year, buoyed by growth across all transportation service lines.

Total operating expenses increased 8.9% year over year to $458.3 million. However, operating ratio (operating expenses as a percentage of net revenues) of 64.2% compared favorably with 66.6% in the year-ago period.

During the quarter under review, the company returned $168.4 million to shareholders through a combination of dividends ($70 million) and share repurchases ($98.4 million), reflecting a surge of 42.4% year over year. The company will remain focused on rewarding shareholders.

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

 

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

Segmental Results

Total revenues at North American Surface Transportation (NAST) were $2.77 billion (up 6%) in the fourth quarter while the same at Global Forwarding totaled $677.13 million (up 14.5%). At Robinson Fresh, the metric logged $531.82 million (down 10.6%) 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) delivered net revenues of $688.89 million in the quarter under consideration, up 13.9% from the prior-year period’s figure.

Truckload net revenues grew 15.6% year over year to $395.61 million. Additionally, net revenues at Less-than-Truckload improved 11.4% year over year to $117.33 million.

Net revenues at the Intermodal segment jumped 46.5% year over year to $8.6 million.

Net revenues at the Ocean transportation segment climbed 12.4% year over year to $82.23 million. The same at the Air transportation division ascended 11.5% year over year to $30.76 million. Customs net revenues augmented 12.4% to $23.76 million.

Net revenues at Other logistics services inched up 3.5% year over year to $30.6 million.

Sourcing: Net revenues at the segment dropped 8.2% year over year to approximately $24.89 million.

Liquidity

This Zacks Rank #3 (Hold) company exited the fourth quarter with cash and cash equivalents of $378.62 million compared with $333.89 million at the end of 2017. Long-term debt was $1,341.35 million compared with $750 million at 2017 end. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

2019 Outlook

The company anticipates capital expenditures between $80 and $90 million for 2019 with the majority to be spent on technology. Additionally, effective tax rate is estimated in the range of 24-25% for the current year.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting fourth-quarter earnings reports from key players, namely Expeditors International of Washington, Inc. EXPD, Old Dominion Freight Line, Inc. ODFL and Air Lease Corporation AL. While Old Dominion will release fourth-quarter results on Feb 7, Expeditors and Air Lease will report the same on Feb 19 and Feb 21, respectively.

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