C.H. Robinson Worldwide Inc.
) has reported first quarter 2012 earnings per share of 65 cents,
in line with the Zacks Consensus Estimate. Reported earnings
also increased 8.1% from 62 cents in the year-ago quarter,
primarily driven by Intermodal and trucking revenues.
Total revenue in the first quarter escalated 7.9% year over year
to $2.55 billion, but lagged the Zacks Consensus Estimate of $2.61
Total operating expenses rose 5.0% year over year to $245.2
million, primarily due to 4.8% and 5.5% increases in personnel and
selling, general and administrative expenses, respectively.
Total operating ratio (operating expenses as a percentage of net
revenue) was 57.2% in the reported quarter, reflecting an
improvement of 80 basis points (bps) from 59.1% in the year-ago
The segment (comprising Truck, Intermodal, Ocean, Air and Other
logistics services) reported gross profit of $401.4 million in the
first quarter, up 7.1% from the year-ago period.
Gross profit from Truck (comprising truckload and
less-than-truckload services) upped 7.1% to $315.4 million,
attributable to volume growth and higher pricing.
Gross profit from Intermodal increased 1.2% year over year to
$9.7 million on higher shipments as well as prices and fuel
surcharges, offsetting the declines in net revenue margin due to a
change business mix.
Gross profit from Ocean also inched up 1.2% to $15.8 million
based on higher loads, offsetting price declines.
Air transportation gross profit plunged 3.4% year over year to
$8.9 million, primarily due to lower pricing that offset volume
Gross profit from Other logistics services registered a 24.2%
year-over-year growth to $17.5 million on better transportation
management and higher customs net revenues.
The segment's gross profit decreased 3.2% year over year to $31.9
million primarily due to a decline in net revenue margin that
remained an overhang on volume growth.
The segment's (comprising income from subsidiary, T-Chek Systems
Inc.) gross profit climbed 8.1% year over year to $15.6 million in
the first quarter, driven by an increase in fees, arising from
higher fuel prices and transaction alongside changes in commercial
Liquidity & Debt Position
C.H. Robinson ended the quarter with cash and cash equivalents
of $311.4 million as against $359.3 million in the year-ago period
and had no debt on its balance sheet. Cash from operation rose to
$77 million at the end of the quarter from $52.6 million in the
We believe the company remains well positioned to benefit from
its freight transportation business as evident by strong shipments
and pricing in Intermodal and Truck. Further, the cash-rich balance
sheet with no debt and increasing shareholder returns make it more
attractive for long-term investment.
However, the company remains significantly challenged by higher
operating costs followed by regulatory issues and competitive
threats from logistics services companies such as
Expeditors International of Washington Inc.
Thus, we are currently maintaining our long-term Neutral
recommendation on C.H. Robinson. For the short term, the company
holds a Zacks #3 Rank (Hold).
CH ROBINSON WWD (
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