MINNEAPOLIS - C.H. Robinson Worldwide, Inc. (NASDAQ: NASDAQ:CHRW) reported a notable beat in its first-quarter earnings, with adjusted EPS coming in at $0.86, surpassing the analyst expectations of $0.63. The global logistics company also saw its revenue rise to $4.41 billion, exceeding the consensus estimate of $4.27 billion.
Despite these positive figures, the company experienced a 4.5% decrease in gross profits YoY to $647.5 million, although this was a 6.3% sequential improvement. The stock surged by 11% following the earnings release, indicating a strong investor endorsement of the quarterly results which outperformed estimates.
The company's President and CEO, Dave Bozeman, attributed the stronger-than-expected performance to the implementation of a new Lean-based operating model and disciplined pricing and capacity procurement efforts, particularly in the truckload business.
"Our first quarter results reflect a change in our execution and discipline," said Bozeman. He expressed optimism about the company's continuous improvement despite the challenges in the freight market, including an oversupply of capacity.
Total revenues for the quarter fell 4.3% compared to the same period last year, primarily due to lower pricing in truckload services, which was partially offset by higher pricing and increased volume in ocean services.
Operating expenses saw a slight increase of 1.1% to $530.6 million, with personnel expenses down 1.0% to $379.1 million due to cost optimization efforts. The company's operating income decreased by 21.1% YoY to $127.1 million, and the adjusted operating margin contracted by 420 basis points to 19.3%.
Cash used by operations in the first quarter was $33.3 million, a significant shift from the $254.5 million generated in the same quarter of the previous year. The decline in cash flow was mainly due to changes in net operating working capital. Despite the cash flow decrease, C.H. Robinson returned $90.7 million to shareholders through dividends and stock repurchases.
Looking ahead, C.H. Robinson expects capital expenditures for 2024 to be between $85 million and $95 million. The company's resilience and strategic adjustments seem to be paying off, as reflected by the positive market reaction and the CEO's confidence in the team's ability to maintain a high level of operational discipline.
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