C.H. Robinson (CHRW) Q1 Earnings Top, Revenues Lag Estimates

C.H. Robinson Worldwide’s (NASDAQ:CHRW) first-quarter 2019 earnings of $1.16 per share surpassed the Zacks Consensus Estimate of $1.13. The bottom line also improved 14.9% year over year.

Total revenues came in at $3,751.2 million, which fell short of the Zacks Consensus Estimate of $3,968.7 million and also declined 4.4% year over year. The downturn can be attributed to unfavorable pricing across most transportation service lines.

Total operating expenses increased 4.6% year over year to $454.3 million owing to higher personnel costs and selling, general and administrative expenses. However, the operating ratio (operating expenses as a percentage of net revenues) of 66.9% compared favorably with 69.3% in the year-ago period. Notably, lower the value of the metric the better.

Impressively, the company returned $146.4 million to its shareholders through a combination of cash dividends ($69.7 million) and share repurchases ($76.7 million), reflecting an increase of 8.7% year over year. Capital expenditures totaled $13.9 million in the quarter under review.

Segmental Results

At North American Surface Transportation (NAST), total revenues were $2.8 billion (down 3.8%) in the first quarter, down 3.8%. Net revenues at the segment increased 11%.Notably, NAST results include those of Robinson Fresh transportation, which were previously reported under a separate segment.

Total revenues at Global Forwarding summed $537.6 million, down 2.9%. Net revenues at the segment increased 3.4%.

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 $651.7 million in the quarter under consideration, up 9.3% from the prior-year period’s figure.

Truckload net revenues grew 14.4% year over year to $378 million. Additionally, net revenues at Less-than-Truckload improved 3.6% year over year to $116.3 million.

At the Intermodal segment, net revenues decreased 4% year over year to $6.1 million.

Net revenues at the Ocean transportation segment climbed 3.9% year over year to $71.5 million. The same at the Air transportation division declined 4.5% year over year to $27.6 million. Customs net revenues augmented 5.9% to $21.9 million.

Other logistics services’ net revenues inched up 5.2% year over year to $30.4 million.

Sourcing: Net revenues at the segment decreased 9.2% year over year to approximately $27.1 million.

Liquidity

This Zacks Rank #3 (Hold) company exited the first quarter with cash and cash equivalents of $445.5 million compared with $378.6 million at the end of 2018. Long-term debt was $1,341.61 million compared with $1,341.35 million at 2018 end. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

2019 Outlook

C.H. Robinson anticipates capital expenditures between $80 million and $90 million for 2019, with the majority to be spent on technology. Additionally, the effective tax rate is estimated in the 24-25% band for the year.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting earnings reports from key players namely Hertz Global Holdings (NYSE:HTZ) , Expeditors International of Washington (NASDAQ:EXPD) and Air Lease Corporation (NYSE:AL) . While Hertz Global will report first-quarter 2019 earnings on May 6, Expeditors and Air Lease will announce the same on May 7 and 9, respectively.

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