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C.H. Robinson (CHRW) Up 11.6% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for C.H. Robinson Worldwide (CHRW). Shares have added about 11.6% in that time frame, outperforming 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 drivers.

Earnings Miss at C.H. Robinson in Q3

C.H. Robinson reported disappointing third-quarter 2022 results wherein both earnings and revenues missed the Zacks Consensus Estimate.

Quarterly earnings of $1.78 per share missed the Zacks Consensus Estimate of $2.15 and declined 3.8% year over year. Total revenues of $6,015.4 million lagged the Zacks Consensus Estimate of $6,368.2 million and declined 4% year over year. The year-over-year downfall was due to the lower ocean and air pricing, partially offset by higher pricing in less-than-truckload (LTL) and truckload.

Operating expenses grew 12.4% year over year to $599.6 million. Adjusted gross profit climbed 5.1% year over year to $887.19 million.

Segmental Results

At North American Surface Transportation, total revenues were $4,002.46 million (up 4.9% year over year) in the third quarter. Segmental revenues benefited from higher LTL and truckload pricing. Adjusted gross profit at the segment ascended 22.5%.

Total revenues at Global Forwarding were $1,511.11 million, down 23.6% year over year. Results were weighed down by lower pricing and volumes in CHRW’s ocean and air services, reflecting softening market demand. Adjusted gross profit at the segmentfell 20.1% year over year.

Revenues from other sources (Robinson Fresh, Managed Services and Other Surface Transportation) increased 6.8% to $501.8 million.

Below we present the division of adjusted profit among the service lines (on an enterprise basis).

Transportation: The unit (comprising Truckload, Intermodal, LTL, Ocean, Air, Customs and Other logistics services) delivered an adjusted gross profit of $861.82 million in the quarter under consideration, up 5.2% from the prior-year figure.

Adjusted gross profit at the Truckload sub-group climbed 19.6% year over year to $398.41 million. LTL’s adjusted gross profit increased 22.4% year over year to $162.13 million. Customs-adjusted gross profit augmented 9.5% to $27.88 million. Other logistics services’ adjusted gross profit rose 23.4% to $65.44 million.

Adjusted gross profit at the Ocean transportation segment fell 25.5% year over year to $160.12 million. The same at the air transportation sub-group fell 21% to $47.83 million.

Balance-Sheet Data

CHRW exited the third quarter with cash and cash equivalents of $187.53 million compared with $238.92 million at the end of June 2022. Long-term debt was $1.42 billion compared with $1.59 billion at the end of June 2022.

CHRW generated $625.5 million of cash from operations in the third quarter. Capital expenditures came in at $31.3 million in the reported quarter.Capital expenditures for 2022 are anticipated to lie at the high end of the previously guided range of $110-$120 million.

In the third quarter, the company repurchased shares worth $535.7 million and paid $71 million in dividends.

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, estimates revision have trended downward during the past month.

The consensus estimate has shifted -22.01% due to these changes.

VGM Scores

At this time, C.H. Robinson has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise C.H. Robinson has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

C.H. Robinson belongs to the Zacks Transportation - Services industry. Another stock from the same industry, Hertz Global Holdings, Inc. (HTZ), has gained 0.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.

Hertz Global Holdings, Inc. reported revenues of $2.5 billion in the last reported quarter, representing a year-over-year change of +12.1%. EPS of $1.08 for the same period compares with $1.20 a year ago.

For the current quarter, Hertz Global Holdings, Inc. is expected to post earnings of $0.52 per share, indicating a change of -42.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -5% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Hertz Global Holdings, Inc. Also, the stock has a VGM Score of A.

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