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Will C.H. Robinson (CHRW) Q4 Earnings Please Investors?

C.H. Robinson WorldwideCHRW is scheduled to unveil its fourth-quarter 2016 results on Jan 31, after the close of market.

In the third quarter of 2016, this transportation company had reported lower-than-expected earnings per share. Moreover, the bottom line deteriorated 6.25% year over year.

On the other hand, total revenue beat the Zacks Consensus Estimate of $3,328 million, but dropped 1.8% year over year to $3,356 million. Results were hurt by the weak pricing environment.

However, the stock has seen brighter times since the third quarter earnings miss, gaining over 6% since that time. The stock has outpaced the Zacks categorized Transportation-Services industry over the last three months. The stock has returned 6.12%, while the industry lost 4.42% over the same period.

Moreover, an earnings beat might not be too difficult for C.H. Robinson in the quarter due to reduced expectations. The Zacks Consensus Estimate for the fourth quarter of 2016 is a pretty conservative 84 cents, which is 3.4% below the year-ago figure.

Our quantitative model shows that the company is likely to beat earnings because it has the perfect combination of two key ingredients.

Zacks ESP: The Earnings ESP for C.H. Robinson is +2.38% with the Most Accurate estimate of 86 cents that exceeds the Zacks Consensus Estimate by 2 cents. 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 #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered while going into an earnings announcement.

The combination of C.H. Robinson's favorable Zacks Rank and a positive ESP makes us reasonably confident of earnings beat.

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

We are impressed by the company's efforts to reward shareholders through dividends and share buy backs. Furthermore, in Dec 2016, the board of directors of the company approved an 4.7% hike in its quarterly cash dividend, raising the figure to $0.45 per share. We believe that the dividend hike not only highlights C.H. Robinson's commitment to create value for shareholders, but also underscores the company's healthy financial condition and confidence on its business, going forward.

Moreover, a look at the past records reveals C.H. Robinson's stable dividend payment history. This investor-friendly attitude certainly boosts the confidence of the shareholders in the stock.

We are also impressed by the company's efforts to expand. In keeping with this objective, the company announced acquisition of Melbourne, Australia based company APC Logistics for around AUD 300 million (approx. $225 million) in the fourth quarter. This deal has boosted C.H. Robinson's presence in the Australia- New Zealand region. APC Logistics, prior to being acquired, was a well-known name in the freight industry providing freight forwarding and brokerage services with commendable customer and carrier relationships. The renewal of the logistics partnership with Tesco in Nov, 2016 is also a positive.

Other Stocks to Consider

Apart from C.H. Robinson, investors who are interested in the transportation space may also consider the following stocks. This is because our model shows that these companies too possess the right combination of elements to post an earnings beat this quarter.

American Airlines GroupAAL holds a Zacks Rank #2 and an Earnings ESP of +1.11%. It is scheduled to report fourth-quarter results on Jan 27. The company beat the Zacks Consensus Estimate in three of the last four quarters with an average positive surprise of 20.48%. You can see the complete list of today's Zacks #1 Rank stocks here .

Southwest Airlines Co.LUV carries a Zacks Rank #2 and an Earnings ESP of +1.47%. It is scheduled to report fourth-quarter results on Jan 26. The company beat the Zacks Consensus Estimate in two of the last four quarters with an average positive surprise of 2%.

Spirit AirlinesSAVE has a Zacks Rank #2 and an Earnings ESP of +2.78%. It is scheduled to report fourth-quarter results on Feb 7. The company beat the Zacks Consensus Estimate in each of the last four quarters with an average positive surprise of 4.71%.

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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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