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Is C.H. Robinson (CHRW) Likely to Beat on Earnings in Q3?

C.H. Robinson Worldwide, Inc . CHRW is scheduled to report third-quarter 2018 financial numbers on Oct 30, after the closing bell.

In the second quarter of 2018, the company delivered better-than-expected earnings and revenues. Moreover, both the metrics improved on a year-over-year basis. Results were aided by growth across all transportation service lines as well as a lower tax rate.

The company also boasts an impressive earnings history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters with an average beat of 7.2%.

The picture for the third quarter seems rosy as well with the consensus mark for third-quarter earnings having risen 4.5% in the last 90 days.

Why a Likely Positive Surprise?

Our proven model shows that C.H. Robinson is likely to beat on earnings in the third quarter as well, courtesy of a perfect combination of the following two key ingredients:

Earnings ESP : C.H. Robinson has an Earnings ESP of +0.56%, representing the percentage difference between the Most Accurate Estimate of $1.18 per share and the Zacks Consensus Estimate, pegged lower at $1.17. A positive Earnings ESP is indicative of a likely earnings surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : C.H. Robinson carries a Zacks Rank #2 (Buy). Notably, stocks with a favorable Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) when combined with a positive ESP have significantly higher chances of beating estimates.

Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

C.H. Robinson Worldwide, Inc. Price and EPS Surprise

C.H. Robinson Worldwide, Inc. Price and EPS Surprise | C.H. Robinson Worldwide, Inc. Quote

Factors Likely at Play

High freight demand is anticipated to boost C.H. Robinson's results in the third quarter. The transportation segment (comprising Truckload, Intermodal, Less-than-Truckload, Ocean, Air, Customs and Other logistics services) is expected to perform well in the quarter to be reported, primarily on the back of increased pricing. The consensus mark for transportation revenues stands at $661 million, higher than $564 million reported a year ago. The estimate also lies above the last reported quarter's figure of $640 million.

Moreover, the company's growth-by-acquisition policy is encouraging. Similar to the last few quarters, the company's Milgram & Company buyout is expected to contribute to its top-line growth this soon-to-be-reported quarter. Further, a reduced tax rate from the Tax Cuts and Jobs Act is likely to foster bottom-line growth in the third quarter.

However, the bottom line might be slightly stressed in the quarter due to high operating costs.

Other Stocks to Consider

Investors interested in the broader Transportation sector may also consider Genesee & Wyoming, Inc. GWR , ArcBest Corporation ARCB and Fly Leasing Limited FLY as these stocks too possess the right combination of elements to come up with an earnings beat in their next releases.

Genesee & Wyoming has an Earnings ESP of +0.30% and a Zacks Rank #3. The company will report third-quarter earnings on Oct 30.

ArcBest has an Earnings ESP of +4.14% and sports a Zacks Rank of 1. The company is scheduled to report third-quarter financial numbers on Nov 1. You can see the complete list of today's Zacks #1 Rank stocks here .

Fly Leasing, also flaunting a Zacks Rank of 1, has an Earnings ESP of +2.86%. The company is set to report third-quarter results on Nov 8.

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


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

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