C.H. Robinson Worldwide Inc.
) reported third quarter 2013 adjusted earnings per share of 69
cents, which fell short of the Zacks Consensus Estimate by four
cents. Adjusted earnings fell 4.2% from 72 cents in the
Total revenue in the third quarter escalated 15.1% year over
year to $3.32 billion, surpassing the Zacks Consensus Estimate of
Total operating expenses increased 16.9% year over year to
$287 million in the third quarter, resulting in an operating
ratio (operating expenses as a percentage of net revenue) of
61.9%, up from 56.7%.
The segment (comprising Truck, Intermodal, Ocean, Air and Other
logistics services) reported gross profit of $429.98 million in
the third quarter, up 12.3% from the year-ago quarter.
Gross profit from Truck (comprising truckload and
less-than-truckload services) dipped 1.3% to $265.5 million.
Gross profit from LTL increased 4.4% year over year to $61.4
Gross profit from Intermodal rose 1.3% year over year to $10.2
Gross profit from Ocean soared 168.6% to $49.7 million aided
by the Phoenix operations acquired in Nov 2012.
Air transportation gross profit grew 100.5% year over year to
$18.1 million primarily attributable to decreased cost of
capacity and increased pricing and the Phoenix acquisition.
Gross profit from Customs increased 117.4% year over year to
Gross profit from other logistics services registered 22.8%
year-over-year growth to $16.1 million on the back of higher
transaction fees and synergies from acquisitions.
The segment's gross profit decreased 9.5% year over year to $30.6
The segment's (comprising income from subsidiary, T-Chek Systems
Inc.) gross profit plunged 82.8% year over year to $2.8 million
due to a divesture in T-Chek system.
Liquidity & Debt Position
C.H. Robinson ended the quarter with cash and cash equivalents
of $129.7 million as against $210 million at the end of 2012. The
company had $500 million in long-term on its balance sheet
compared to no debt in 2012. Cash from operations decreased to
$182.93 million at the end of quarter from $267.16 million a year
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 U.S. 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
C.H. Robinson, which operates with other freight carriers like
Expeditors International of Washington Inc.
), has a Zacks Rank #4 (Sell).
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