82.30 0.00 (0.00%)
After hours: 4:38PM EDT
Relative Strength Index (RSI)
|Bid||82.29 x 800|
|Ask||82.30 x 1200|
|Day's Range||81.73 - 83.33|
|52 Week Range||56.94 - 91.23|
|Beta (5Y Monthly)||0.61|
|PE Ratio (TTM)||17.17|
|Earnings Date||Jul 28, 2020 - Aug 03, 2020|
|Forward Dividend & Yield||2.04 (2.43%)|
|Ex-Dividend Date||Jun 04, 2020|
|1y Target Est||74.63|
C.H. Robinson (CHRW) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
If you buy and hold a stock for many years, you'd hope to be making a profit. But more than that, you probably want to...
Wall Street transportation equities analysts weren't surprised by narrower margins in C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW) freight brokerage business when the company reported earnings on April 28 after the market's close. After a year when revenue growth was hard to come by, Robinson management had made the decision to ‘take market share' – more on that later – and cut prices to customers. At the same time, an unprecedented truckload volume surge in the month of March raised spot prices.Net revenue margins in Robinson's North American Surface Transportation (NAST) division, comprising truckload, less-than-truckload (LTL), and intermodal brokerage, compressed by 420 basis points (bps) year-over-year and about 80 bps quarter-on-quarter. Robinson's margin across those three lines of business was 13.2% in the first quarter of 2020; margin compression, management said, was driven mostly by truckload pricing dynamics. The trouble was what happened to that net revenue once the brokers covered their loads. Robinson's operating costs failed to adjust to the market. The company's operating margin, the percentage of net revenue converted to operating income, fell from 33.1% in the first quarter of 2019 to 19.3% in the first quarter of 2020, the lowest since Robinson began publicly reporting its financials in 1995. Then Robinson still had to pay taxes and interest on its debt.To be fair, C.H. Robinson operated well in a very tough environment. Note that Echo Global Logistics, Inc. (NASDAQ: ECHO) posted a loss for the quarter, as did J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) freight brokerage, Integrated Capacity Solutions.The gradual and still-in-progress evolution of Robinson's business model from a decentralized network of sales branches to a technology-first organization built largely inside the company's headquarters has yielded some fascinating results already. For starters, NAST was able to achieve a decisive decoupling of trucking volume growth and headcount in the quarter – truckload and LTL volumes were both up 7.5% compared to the year-ago period, while NAST headcount was down by 5.2%. In effect, each NAST employee generated 6.5% more gross revenue than the year prior, and crucially, this happened as contract and spot prices were negative year-over-year.As management noted on the call, the year-over-year productivity gains should not be attributed to a high degree of routing guide compliance, which makes it easier for brokers to source capacity, because average routing guide depth has been roughly the same for five quarters.But when it comes to the flexibility of adjusting operating costs to market conditions, hiring lots of software developers, computer engineers and data scientists comes with a downside."The re-centralization of a tech-enabled, non-asset business over the last decade has shifted comp structures to become less variable than they were in the 2000s," Susquehanna analyst Bascome Majors pointed out in a client note.On the call, Robinson chief executive officer Bob Biesterfeld explained that the incremental headcount additions made in engineering, data science and shared professional services came with a less variable compensation structure. In other words, computer programmers don't want their paychecks tied to trucking rates.Despite the cuts in NAST headcount, the number of employees in "All Other & Corporate" grew by 10.4% year-over-year. When combined with 2.5% headcount growth in Global Forwarding, Robinson's total number of employees grew by 0.4%. That said, Biesterfeld announced that Robinson had furloughed 7% of its employees temporarily until volumes returned to normal.Morgan Stanley's Ravi Shanker was pessimistic about what he perceived as Robinson's lack of flexibility in operating expenses."We believe CHRW's first quarter clearly disproves the bull case of brokers being ‘defensive' in a downturn," Shanker wrote in a client note. "While this was clearly in evidence during the 2016 and 2019 freight recessions as well, the fact that operating income and free cash flow are declining so sharply in a soft volume environment are signs that the cost structure is not as flexible as the market believes."Contrary to Shanker, freight brokerages do well in the initial phase of a downturn, when falling spot rates (costs) outrun lagging contract rates. But there's nothing inherently defensive in the non-asset third-party logistics model that can protect profits after a year-long bear market in freight, a fact noted by Bascome Majors, who wrote that Robinson's "typical variable compensation cushion was largely exhausted by a challenging 2019."But it appears that investors did not fully anticipate Robinson's growing operating costs (personnel costs now consume 58.1% of net revenue, up from 50.1% a year ago, while depreciation and amortization rose 70 bps to 4.3% and other SG&A ballooned from 13.2% to 18.3%).Deutsche Bank's Amit Mehrotra described the results as "incredibly bad," adding that "we thought we made a mistake in our model when entering the actual results, but unfortunately we didn't.""Operating cost performance was meaningfully worse than our forecast," wrote UBS analyst Tom Wadewitz in a client note. "Operating expense rose 1% year-over-year compared to our forecast of an 8% decline."Still, after the call, Wadewitz affirmed his bullish view of the stock and wrote that "we believe that CHRW's scale, tech investments, and balance sheet strength matter."Cowen's Jason Seidel had estimated that Robinson would generate $153.1 million in operating income; the actual result, $109.4 million, was 28.5% lower. Prior to the earnings release on April 28, shares of C.H. Robinson closed at $74.01. CHRW gapped lower on the April 29 market open and dropped as low as $68.86 by mid-morning, but pared losses and closed the day at $71.26, or 3.7% lower than the pre-earnings price on a day that the S&P 500 was up 2.64%.Taking market share?In the first century AD, Seneca the Younger wrote a letter to his friend Lucilius offering a piece of advice. Lucilius was reading too many different books and spreading himself too thin. Seneca encouraged him to focus and concentrate his studies. "Everywhere is nowhere. When a person spends all his time in foreign travel, he ends by having many acquaintances, but no friends."Might the same be said for a market share-taking strategy that crushes profits by 50%? Biesterfeld said that Robinson's 7.5% increase in truckload volumes represented its commitment to taking market share in a quarter when the Cass Freight Index was down between 8% and 9%. Robinson regularly compares its truckload volume growth trends to Cass, which can be somewhat misleading because Cass aggregates freight from all modes, including railroad, barge, air and parcel. As transportation industry watchers know, in the first quarter of 2020, containerized imports into North America fell dramatically when China shut down due to the coronavirus; later air traffic, and with it, air freight volumes fell precipitously. March, however, saw a massive surge in contracted truckload volumes, which at their peak on March 23 were 29% higher year-over-year. In this case, when volumes in each mode diverged from each other, comparing one's own truckload volumes to the whole Cass Index is less helpful.Regardless of the Robinson-Cass comparison, what is still at issue with Robinson's mantra of taking market share is the wisdom of doing so in the first place, especially when even Robinson's management do not expect market share gains to yield meaningful pricing power.The danger is that Robinson may be chasing low-quality revenue and committing itself to occupying indefensible positions; it can't know for sure because management has not articulated a more precise growth strategy. A thoughtfully explained strategic approach to growth in specific verticals based on margin opportunity, volume stability or a differentiated expertise would be received more favorably than deep price cuts.It may also be time to think more ambitiously about mergers and acquisitions. Niche tuck-ins will always be available to some degree, but perhaps Robinson should consider acquiring a larger growth engine, more along the lines of its 1999 purchase of American Backhaulers. The middle market in freight brokerage – companies between $100 million and $1 billion in gross revenue – remains a target-rich environment.Until it is understood what greater market share will enable C.H. Robinson to accomplish, or until it is pursued in a more rational, efficient manner, the anything-goes approach to volume growth brings up another of Seneca's sayings: "The love of bustle is not industry, but only the restlessness of a hunted mind."See more from Benzinga * US Rail Traffic Slips By Over 22% * Business Leaders And Lawmakers Urge Trump To Delay USMCA Launch * Boeing Nosedives After 737 MAX Grounding, COVID-19(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Following today's presentation, Bob Houghton will facilitate a review of previously submitted questions. On our call today will be Bob Biesterfeld, our Chief Executive Officer; and Mike Zechmeister, our Chief Financial Officer.
Weaker companies may wind up distressed, but higher-quality ones may get too pricey. Go for middle-ground quality, Goldman Sachs analysts suggest.
After reading C.H. Robinson Worldwide, Inc.'s (NasdaqGS:CHRW) most recent earnings announcement (31 December 2019), I...
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Good day,The St. Christopher Truckers Relief Fund (SCF) has announced a $50,000 donation from C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW). The donation is one of the largest SCF has ever received, the organization said, and comes at a time when resources are being stretched thin,"Alongside all the healthcare workers, truck drivers on the road right now are true heroes, battling this virus on the frontlines," Dr. Donna Kennedy, SCF executive director, said. "Within the next two weeks we expect to see a significant increase in truckers contracting the coronavirus, many of whom do not have healthcare coverage or the financial means to support their families. This is going to be a major problem for everyone, including the drivers, the industry, the economy, and Americans across the country."The St. Christopher Truckers Relief Fund provides resources and financial assistance to truck drivers and their families who are out of work due to illness or injury. SCF also provides health and wellness programs."The pivotal role that truck drivers play in keeping our economy moving has been made even clearer in recent weeks as we have faced the COVID-19 crisis. We are proud to play a role in the incredible work St. Christopher Fund is doing to support the driver community, as they continue to get us the supplies we all need during this difficult time," Angie Freeman, chief human resources and ESG officer, and president of the C.H. Robinson Foundation, said.SCF noted that truck drivers are at increased risk due to the numerous touchpoints in their day, from human interaction at delivery and pickup points, to pens, public restrooms and visits to truck stops and travel centers.Truckers needing assistance from SCF may apply by clicking here. To donate to SCF's mission to support truckers and their families in financial need, click here, or contact Shannon Currier at email@example.com.Did you know? Economist Thomas Fullerton predicts U.S. towns near the Mexican border, which rely heavily on trade between the nations, could see unemployment north of 20% by June. Quotable: "Our technical leadership knew it was capable and when we started seeing shortages we said. ‘Wow, maybe this is an opportunity for us to fill a void.'"– Amy Davis, vice president of Cummins Filtration, on the company's ability to take material used in filtration products as feedstock for N95 respirator masks.In other news: Amazon postpones Prime DayAmazon.com, Inc. (NASDAQ: AMZN) Prime Day has been postponed until at least August, according to reports. The day, or in the case of last year, days, traditionally boosts freight volumes in July. (Retail Dive) Rush hour is no moreOne positive to come out of the COVID-19 is that those who need to travel are doing so faster as fewer cars on the roads have resulted in increased highway speeds. (Bloomberg)Car makers extend shutdownsFiat Chrysler Automobiles N.V. (NYSE: FCAU) and Honda Motor Co., Ltd. (NYSE: HMC) are extending their U.S. plant closures into May. Both companies had expected to restart production next week. (Wall Street Journal)Shippers moving to rail, trucks in EuropeThe volatile cost of airfreight is forcing some European shippers to move to trucking and rail services to move goods. (The Loadstar)Canadian National cutting rail capacityCanadian National Railway Company (NYSE: CNI) is eliminating some capacity due to declining volumes now and the potential for low volumes into 2021, it said. (Financial Post)Final thoughts The low price of diesel fuel may be coming to an end as oil markets have trended up in the past two days on news that Russia and Saudi Arabia are close to working out their differences and cutting oil supplies. Diesel dropped another 3-plus cents last week to just $2.58 nationally.Hammer down, everyone!See more from Benzinga * Pandemic Forces Boeing, Airbus To Shut Down Aircraft Plants * Weekly Fuel Report: April 6, 2020 * An Already 'Hard' Trucking Insurance Market Now Faces Upheaval From The Pandemic(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
On CNBC's "Options Action," Mike Khouw spoke about unusually high bullish options activity in C.H. Robinson Worldwide Inc (NASDAQ: CHRW).Khouw said UBS upgraded the logistics company on Wednesday. Although the analyst expects freight shipments to decline, he upgraded the stock because the price of trucking could drop enough to help C.H. Robinson increase its margins a bit.Extreme market volatility has pulled the rug out from under a lot of traders. Attend the virtual Benzinga Options Boot Camp to learn to trade options in a volatile market and start going after solid trades with absolute confidence. Register for FREE at benzingabootcamp.com before space fills up!The call options volume was higher than average, it traded more than four times its daily average call options volume and there was one traded that caught Khouw's attention.There was a purchase of 2,000 contracts of the April $70/$75 call spread for $1.20. The trade breaks even at $71.20 or around 7% above the closing price on Wednesday. The trade can maximally make $3.80, if the stock jumps to $75 or higher by the April expiration.See more from Benzinga * Stifel Analyst Explains Downgrade Of JetBlue And American Airlines * Currency Strategist Sees Strength In US Dollar * Analyst Sees Lower Crude Oil Prices In April(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Today we'll look at C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) and reflect on its potential as an investment. To be...
We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy […]
As the number of confirmed coronavirus cases in Seattle creeps ominously upward, C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW) has asked all employees in the local office to work from home. The logistics company directive dovetails with King County officials' Wednesday recommendation that employees of Seattle companies work at home to halt the spread of COVID-19."Throughout the ongoing coronavirus (COVID-19) outbreak, the safety and security of our employees and their families continues to be our main priority," C.H. Robinson said in an emailed statement Thursday."We are exercising an abundance of caution and are asking all Seattle employees to work from home per the recommendation from public health officials in King County, WA."Spokesperson Kristin Marchiafava declined to reveal how many employees work in the Seattle office. But C.H. Robinson is not the only Puget Sound logistics company impacted by the spread of the virus in Seattle, which has emerged as the epicenter of the outbreak in the United States.On Tuesday, Amazon.com, Inc. (NASDAQ: AMZN) announced that an employee had tested positive for the coronavirus and on Wednesday advised employees not to come into the office."We are recommending that employees in Seattle/Bellevue who are able to work from home do so through the end of the month," an Amazon spokesperson told FreightWaves.A spokesperson for Convoy, the digital solutions startup headquartered in Seattle, said the company would issue a statement on the virus later today.Washington state has reported the largest number of coronavirus cases in the U.S. Health officials as of Thursday afternoon had reported at least 70 confirmed cases. Ten people in the state have died from the virus, while 231 remain under supervision.C.H. Robinson remains "fully operational" globally, according to the emailed statement. "Our people around the world are working hard to continue to deliver goods and help people who are impacted by this situation. They are leveraging our technology and global infrastructure to continue to support both our customers and contract carriers."This is a developing story.Image by Free-Photos from PixabaySee more from Benzinga * Movie Production Drivers Seek Flexibility In Drug Clearinghouse * Inside The Founder's Studio With Craig Fuller On FreightWaves Insiders * Software Companies Must Broaden Offerings To Be Competitive In 2020(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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