Why Is C.H. Robinson (CHRW) Up 0.6% Since Last Earnings Report?
It has been about a month since the last earnings report for C.H. Robinson Worldwide (CHRW). Shares have added about 0.6% in that time frame, underperforming 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 catalysts.
Earnings Beat at C.H. Robinson in Q3
C.H. Robinson’s third-quarter 2021 earnings of $1.85 per share surpassed the Zacks Consensus Estimate of $1.41. The bottom line surged 85% year over year.
Total revenues of $6,263.7 million also outperformed the Zacks Consensus Estimate of $5,377.9 million. The top line jumped 48.3% year over year owing to higher pricing and volumes across most of the company’s service lines.
Total operating expenses increased 26.7% year over year to $533.4 million due to higher personnel expenses. Adjusted gross profit climbed 43.3% year over year to $844.2 million, primarily owing to higher volumes across most of the company’s services, as well as increased adjusted gross profit per transaction.
The company returned $237.2 million to its shareholders in the third quarter through a combination of cash dividends ($69.2 million) and share repurchases ($168.1 million). Capital expenditures totaled $22.7 million in the quarter under review. The company expects capital expenditures in the band of $70 million-$80 million for 2021. Majority of the amount is aimed at technology investments.
Segmental Results
At North American Surface Transportation (“NAST”), total revenues were $3.81 billion (up 30.5%) in the third quarter. Segmental revenues benefited from higher truckload and less-than truckload ("LTL") pricing a as well as an increase in truckload shipments. Adjusted gross profit at the segment ascended 25.1%, driven by 36.5% increase in truckload adjusted gross profit, which in turn was helped by the rise in adjusted gross profit per load and an increase in shipments. NAST results include Robinson Fresh transportation, which was previously reported under a separate segment.
Total revenues at Global Forwarding were $1.98 billion, up more than 100% year over year. With increased freight demand and capacity constraints, higher pricing and volumes in ocean and air services units boosted results. Adjusted gross profit at the segment surged 97.2% year over year.
A historical presentation of the results on an enterprise basis is given below:
Transportation: The unit (comprising Truckload, Intermodal, LTL, Ocean, Air, Customs and Other logistics services) delivered adjusted gross profit of $819.51 million in the quarter under consideration, up 44.7% from the prior-year figure.
Adjusted gross profit at the Truckload segment climbed 32.7% year over year to $333.07 million. LTL adjusted gross profit increased 11.7% year over year to $132.48 million, with adjusted gross profit per order rising 10.5% and LTL volumes increasing 1%.
Adjusted gross profit at the Ocean transportation segment jumped more than 100% year over year to $214.93 million. The same at the air transportation segment climbed 73.1% to $60.55 million. Customs-adjusted gross profit augmented 13.4% to $25.47 million.
Other logistics services’ adjusted gross profit rose 5.3% to $53.02 million.
Sourcing: Adjusted gross profit at the segment increased 7.6% to $24.68 million.
Liquidity
The company exited the third quarter with cash and cash equivalents of $202.65 million compared with $243.80 million at the end of December 2020. Long-term debt was $1.09 billion, nearly flat with the figure reported at the end of December 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?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 23.86% due to these changes.
VGM Scores
At this time, C.H. Robinson has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been 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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C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
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