C.H. Robinson Worldwide Inc.
) has reported third quarter 2012 earnings per share of 72 cents,
missing the Zacks Consensus Estimate by a penny. However,
reported earnings rose 2.9% from 70 cents in the year-ago
Total revenue in the third quarter escalated 6.9% year over
year to $2.88 billion but missed the Zacks Consensus Estimate of
Operating profit for the quarter rose 1.8% year over year to
$187.3 million and total operating expenses increased 2.6% year
over year to $245.4 million. The increase in operating expenses
was mainly due to 0.7% rise in personnel expense and 8.3% in
increase in other selling, general and administrative
Total operating ratio (operating expenses as a percentage of
net revenue) was 56.7% in the reported quarter, reflecting a
deterioration of 20 basis points (bps) from 56.5% in the year-ago
: The segment (comprising Truck, Intermodal, Ocean, Air and Other
logistics services) reported gross profit of $382 million in the
third quarter, up 2.2% from the year-ago period.
Gross profit from Truck (comprising truckload and
less-than-truckload services) grew 2.1% to $327.9 million on
higher truckload volume that grew approximately 8% year over
Gross profit from Intermodal fell 4.4% year over year to $10.1
million due to declines in net revenue margin that clouded volume
growth. Net revenue margins were affected by higher capacity cost
and change in business mix.
Gross profit from Ocean grew 3.5% year over year to $18.5
million based on higher pricing, offsetting volume decline.
Air transportation gross profit plunged 9% year over year to
$9.0 million, primarily due to lower pricing that offset volume
Gross profit from Other logistics services registered 16.6%
year-over-year growth to $17.2 million on better transportation
management and higher customs net revenues.
: The segment's gross profit increased 2.0% year over year to
$33.7 million primarily on higher volumes that compensated for
net revenue margin decline. Additionally, the acquisition of
Timco Worldwide last year also aided the segment's growth.
: The segment's gross profit (comprising income from subsidiary,
T-Chek Systems Inc.) climbed 4.2% year over year to $16.1 million
in the third quarter, driven by an increase in
C.H. Robinson ended the quarter with cash and cash equivalents
of $273 million as against $383 million in the year-ago period
and had no debt on its balance sheet. Cash from operation was
$267.2 million at the end of the quarter compared with $293.6
million in the year-ago period.
We believe the company remains well positioned to benefit from
its freight transportation business with recovery in truckload
business. However, the company remains significantly challenged
by higher transportation costs followed by regulatory issues and
competitive threats from logistics services companies such as
Expeditors International of Washington Inc.
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).
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