C.H. Robinson Misses Q2 Earnings - Analyst Blog


C.H. Robinson Worldwide Inc. ( CHRW ) reported second-quarter 2013 adjusted earnings per share of 70 cents, which fell short of the Zacks Consensus Estimate of 74 cents. Adjusted earnings fell 1.4% from 71 cents in the year-ago quarter.

Total revenue in the second quarter of 2013 escalated 11.3% year over year to $3.29 billion,  but missed the Zacks Consensus Estimate of $3.34 billion.

Total operating expenses rose 20.6% year over year to $290.1 million, resulting in an operating ratio (operating expenses as a percentage of net revenue) of 61.4%, up from 56.5%.

Segment Details

Transportation : The segment (comprising Truck, Intermodal, Ocean, Air and Other logistics services) reported net revenue of $431.1 million in the second quarter, up 16.8% from the year-ago period.

Net revenue from Truck (comprising truckload and less-than-truckload services) increased 4.0% to $325.0 million in the reported quarter, attributable to volume growth from the acquisition of Apreo Logistics S.A. in Oct 2012 as well as increased shipments.

Net revenue from Intermodal fell 1.0% year over year to $9.9 million due to lower volumes, partially offset by increased net revenue margin. Net revenue margin increased due to change in business mix.  

Net revenue from Ocean soared a massive 189.7% to $49.1 million aided by the acquisition of Phoenix operations in Nov 2012.

Air transportation net revenue grew 91.0% year over year to $20.2 million primarily attributable to the Phoenix acquisition.

Net revenue from Customs leaped 148.3% year over year to $9.8 million primarily attributable to the Phoenix acquisition.

Net revenue from other logistics services registered a 14.8% year-over-year growth to $17.1 million on the back of synergies arising from acquisitions.

Sourcing : The segment's net revenue decreased 3.6% year over year to $38.7 million primarily due to lower net revenue margin.

Payment Services : The segment's (comprising income from subsidiary, T-Chek Systems Inc.) net revenue reduced 83.4% year over year to $2.7 million in the second quarter, driven by divesture in T-Chek system.

Liquidity & Debt Position

C.H. Robinson ended the second quarter of 2013 with cash and cash equivalents of $150.0 million as against $210.0 million at the end of 2012. The company had $365.6 million in debt on its balance sheet at the end of second-quarter 2013 compared with $253.6 million at the end of 2012. Cash from operations decreased to $58.3 million at the end of first half of 2013 as compared to $110.0 million at the end of first half of 2012.

Other Stocks

Another logistic company, Expeditors International of Washington Inc. ( EXPD ), reported second-quarter results on Aug 6, 2013 after the market closes. The company's adjusted earnings of 45 cents beat the Zacks Consensus Estimate of 43 cents.

Currently, C.H. Robinson has a Zacks Rank #3 (Hold). Other stocks worth considering in this sector include Arkansas Best Corporation ( ABFS ) and Con-Way Inc. ( CNW ). Both these companies have a Zacks Rank #2 (Buy).

Our Analysis

Although we remain optimistic on the company's ability to achieve its long-term growth goal, we believe that the competitive freight market, declining truckload market share, and limited margin expansion opportunities could restrict near-term growth. However, the company's flexible business structure, efficient cost control measures along with revenue growth from strong pricing will prove beneficial in the near future.

ARKANSAS BEST (ABFS): Free Stock Analysis Report

CH ROBINSON WWD (CHRW): Free Stock Analysis Report

CON-WAY INC (CNW): Free Stock Analysis Report

EXPEDITORS INTL (EXPD): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ABFS , CHRW , CNW , EXPD



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