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C.H. Robinson (CHRW) Down 0.3% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for C.H. Robinson Worldwide (CHRW). Shares have lost about 0.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is C.H. Robinson due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

C.H. Robinson Q1 Earnings & Revenue Lag

C.H. Robinson  reported disappointing first-quarter 2023 results wherein both earnings and revenues missed the Zacks Consensus Estimate.

Quarterly earnings (excluding 2 cents from non-recurring items) of 98 cents per share missed the Zacks Consensus Estimate of $1.01 and declined 52.2% year over year due to unfavorable pricing in ocean and truckload services. Total revenues of $4611.7 million lagged the Zacks Consensus Estimate of $4780 million and declined 32.3% year over.

Operating expenses declined 6.4% year over year to $524.6 million. Adjusted gross profit fell 24.3% to $685.6 million, owing to lower adjusted gross profit per transaction in ocean and truckload.

Segmental Results

North American Surface Transportation’s total revenues were $3,304.18 million (down 19.7% year over year) in the March quarter. Segmental revenues were hurt by lower truckload pricing due to lackluster freight demand. Adjusted gross profit of the segment declined 15.7%.

Total revenues from Global Forwarding were $790 million, down 64% year over year. Results were weighed down by lower pricing in CHRW’s ocean and air services, reflecting softening market demand. Adjusted gross profit of the segment fell 44.7% year over year.

Revenues from other sources (Robinson Fresh, Managed Services and Other Surface Transportation) increased 2.1% to $517.5 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 $656.9 million in the quarter under consideration, down 25.2% from the prior-year figure.

Adjusted gross profits of Truckload, LTL and Customs declined 19.8%, 9% and 15.1% year over year to $288.6 million, $138.6 million and $23.3 million, respectively. However, other logistics services’ adjusted gross profit rose 16.7% to $64.9 million.

Adjusted gross profit of the Ocean transportation segment fell 50.3% year over year. The metric fell 49% to $31.3 million in the Air transportation sub-group.

Balance-Sheet Data

CHRW exited the first quarter with cash and cash equivalents of $239.1 million compared with $217.4 million at the end of 2022. Long-term debt was $920.2 million compared with $920.04 million at the end of 2022.

CHRW generated $254.5 million of cash from operations in the first quarter. Capital expenditures were $27 million in the reported quarter.

In the first quarter of 2023, the company repurchased shares worth $51.2 million and paid $73.4 million in cash dividends.

2023 Outlook

Capital expenditures for 2023 are anticipated to be between $90 million and $100 million. Full-year effective tax rate is projected in the range of 19-21%.

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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 -14.22% 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. However, the stock was allocated a grade of B on the value side, putting it in the top 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. Notably, C.H. Robinson has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report

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