C.H. Robinson Worldwide Inc.
) has reported fourth quarter 2012 adjusted earnings per share of
68 cents, which fell short of the Zacks Consensus Estimate by a
couple of cents. Adjusted earnings inched up 1.5% from 67
cents in the year-ago quarter. For fiscal 2012, earnings per
share climbed 5.3% year over year to $2.76.
Total revenue in the fourth quarter escalated 15.7% year over
year to $2.97 billion, surpassing the Zacks Consensus Estimate of
$2.86 billion. Total revenue in the full year increased 9.9% year
over year to $11.4 billion.
Total operating expenses rose 35.6% year over year to $311
million in the fourth quarter, resulting in an operating ratio
(operating expenses as a percentage of net revenue) of 70%, up
from 57.5%. Total operating expenses for the year increased 10.9%
year over year to $1,042 million. Total operating ratio in fiscal
2012 was 60.7%, up from 57.6% a year ago.
The segment (comprising Truck, Intermodal, Ocean, Air and Other
logistics services) reported gross profit of $444.6 million in
the fourth quarter, up 10.8% from the year-ago period.
Gross profit from Truck (comprising truckload and
less-than-truckload services) increased 7.1% to $328.3 million in
the reported quarter, attributable to volume growth and synergies
arising from the acquisition of Apreo Logistics S.A. in Oct
Gross profit from Intermodal fell 11.6% year over year to $9
million due to lower net revenue margin, which was affected by
increased cost of capacity.
Gross profit from Ocean soared 98% to $33.7 million aided by
Phoenix operations acquired in Nov 2012.
Air transportation gross profit grew 81.1% year over year to
$15.9 million primarily attributable to decreased cost of
capacity and increased pricing and Phoenix acquisition.
Gross profit from other logistics services registered a 37%
year-over-year growth to $22.2 million on the back of higher
transaction fees and synergies arising from acquisitions.
The segment's gross profit increased 11.3% year over year to
$30.5 million primarily on higher net revenue margin.
The segment's (comprising income from subsidiary, T-Chek Systems
Inc.) gross profit climbed 67.6% year over year to $4.9 million
in the fourth quarter, driven by divesture in T-Chek system.
Liquidity & Debt Position
C.H. Robinson ended the year with cash and cash equivalents of
$210 million as against $373.7 million in the year-ago period and
had $253.6 million in debt on its balance sheet compared to no
debts last year. Cash from operations rose to $460 million at the
end of the year from $430 million a year ago.
Another logistic company,
Expeditors International of Washington Inc.
), is expected to report its fourth-quarter results on Feb 26,
before the opening bell. The company has a Zacks Consensus
Estimate of 43 cents for its fourth-quarter earnings.
Other stocks worth considering in this sector include
Grupo Aeroportuario del Pacifico S.A.B. de CV
). Both these companies have a Zacks Rank #2 (Buy) rating.
We believe C.H. Robinson's asset light model with diversified
freight forwarding solutions provide earnings flexibility in an
economic downturn. The company's near-term growth is expected to
be driven by synergies arising from its acquisitions, expansion
of US truckload brokerage, penetration in the less-than-truckload
and intermodal markets, expansion of Transportation Management
Center offerings and international freight forwarding. However,
factors like competitive freight market, declining truckload
market share and limited margin expansion opportunities could
restrict near-term growth.
C.H. Robinson Has Zacks Rank #3 (Hold).
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