C.H. Robinson (CHRW) Shares Slip Despite Q3 Earnings Beat
C.H. Robinson Worldwide’s CHRW third-quarter 2020 earnings of $1 per share surpassed the Zacks Consensus Estimate of 99 cents. However, the bottom line declined 6.5% year over year, which might have disappointed investors, causing shares of the company to decline 4.5% in after-market trading on Oct 27.
Total revenues of $4,224.8 million not only outperformed the Zacks Consensus Estimate of $3,909 million, but also increased 9.6% year over year owing to higher pricing and increased volumes across most of the company’s service lines, thanks to gradual recovery in the freight environment.
Total operating expenses dipped 2.6% year over year to $421.03 million, primarily due to cost savings of approximately $40 million. However, operating ratio (operating expenses as a percentage of net revenues) deteriorated to 71.4% from 68.3% in the year-ago quarter. With respect to this metric, lower the value, the better.
The company returned $71.9 million to its shareholders in the third quarter through a combination of cash dividends ($70.3 million) and share repurchases ($1.6 million). Capital expenditures totaled $15.2 million in the quarter under review. Full-year capital expenses are expected between $50 million and $55 million, with the maximum reserved for technology spends. Previously, the company anticipated capital expenses to be in the range of $60-$70 million.
C.H. Robinson Worldwide, Inc. Price, Consensus and EPS Surprise
C.H. Robinson Worldwide, Inc. price-consensus-eps-surprise-chart | C.H. Robinson Worldwide, Inc. Quote
Segmental Results
At North American Surface Transportation (“NAST”), total revenues were $2,923.84 million (up 3.5%) in the third quarter. Segmental revenues increased due to higher truckload pricing and increase in less than truckload ("LTL") shipments. However, net revenues in the segment dropped 15.2% despite the Prime Distribution Services acquisition contributing 3.5 percentage points to segmental results. NAST results include Robinson Fresh transportation, which was previously reported under a separate segment.
Total revenues at Global Forwarding summed $831.96 million, up 39.2% year over year. Higher pricing in ocean and air, increased charter flights, and larger shipment sizes boosted results. Net revenues at the segment climbed 16.1% 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 net revenues of $566.33 million in the quarter under consideration, down 6.9% from the prior-year figure.
Truckload net revenues declined 21% year over year to $251.07 million. Volumes inched up 0.5% year over year. LTL net revenues dropped 4.8% year over year to $118.56 million despite volumes increasing 13.5% in the quarter.
At the Intermodal segment, net revenues increased 4.9% year over year to $7.45 million. Intermodal volumes rose 2.5% year over year. Net revenues at the Ocean transportation segment ascended 14.2% year over year to $88.93 million. The same at the air transportation segment surged 29% to $34.98 million. Meanwhile, customs net revenues slid 5.3% to $22.46 million.
However, Other logistics services’ net revenues rose 42.8% to $42.87 million.
Sourcing: Net revenues at the segment slipped 8.5% to $22.94 million.
Liquidity
This Zacks Rank #3 (Hold) company exited the third quarter with cash and cash equivalents of $252.57 million compared with $447.86 million at the end of 2019. Long-term debt was $1,093.09 million compared to $1,092.45 million at 2019-end. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Sectorial Snapshot
Let’s take a look into some other Zacks Transportation sector companies’ third-quarter earnings.
Southwest Airlines Co. LUV, carrying a Zacks Rank #3, incurred a loss of $1.99 per share (excluding 3 cents from non-recurring items) in the third quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $2.44. Moreover, operating revenues of $1,793 million surpassed the Zacks Consensus Estimate of $1,678.2 million.
Trinity Industries Inc TRN, carrying a Zacks Rank #2 (Buy), reported third-quarter 2020 earnings (excluding 4 cents from non-recurring items) of 17 cents per share, massively surpassing the Zacks Consensus Estimate of 5 cents. Total revenues of $459.4 million also outperformed the Zacks Consensus Estimate of $443.8 million.
CSX Corporation CSX, carrying a Zacks Rank of 3, reported third-quarter 2020 earnings of 96 cents per share, surpassing the Zacks Consensus Estimate of 93 cents. However, total revenues of $2,648 million lagged the Zacks Consensus Estimate of $2,704.6 million.
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