Markets
GSL

Will C.H. Robinson's (CHRW) Earnings Let Down Investors? - Analyst Blog

A generic image of a calculator, a person holding a pen and papers laid out on a table.
Credit: Shutterstock photo

C.H. Robinson Inc.CHRW is set to release first-quarter 2015 results on April 27 after the market closes.

Last quarter, the company had delivered a positive earnings surprise of 1.32%. Let's see how things are shaping up prior to this announcement.

Factors at play

We believe factors like a competitive freight market and a declining truckload market share will impact the to-be-reported quarterly results. The increasing cost of transportation is likely to adversely impact results at C.H. Robinson in the first quarter as the company struggles to pass on the higher transportation costs to customers. Furthermore, adverse foreign currency movements courtesy a strong dollar is another hurdle for the company that could hurt first quarter results. The weak balance sheet of the company also poses concern.

Despite these headwinds, C.H. Robinson has retained its position among the first-in-class 3PL companies, given its consistent growth rate over the past few years. The company plans to execute its go-to-market strategies with the resources available and expand business through investments made in the last couple of years. Notably, the demand for 3PL services is growing at a rapid pace as shippers seek cost effective one-stop solutions for their freight forwarding requirements. The company intends to gain market share through strategic investments made in technology and currently available resources.

Earnings Whispers

Our proven model does not conclusively show that C.H. Robinson is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here, as elaborated below.

Zacks ESP : C.H. Robinson has an earnings ESP of 0.00%. This is because the Most Accurate estimate is in line with the Zacks Consensus Estimate of 74 cents.

Zacks Rank: C.H. Robinson has a Zacks Rank #4 (Sell). Note that, we caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions. C.H. Robinson's first-quarter 2015 earnings estimate has slipped by a penny to 74 cents over the last 30 days.

Stocks to Consider

Here are some companies in the transportation sector that investors may consider instead, as our model shows they have the right combination of elements to post an earnings beat this quarter:

Virgin America VA carries a Zacks Rank #3 and an earnings ESP of +7.14%. The company will report its first-quarter results on Apr 30, before the commencement of trading.

Global Ship Lease, Inc. GSL carries a Zacks Rank #2 and has an earnings ESP of +100%. The company is scheduled to report its first-quarter 2015 results on Apr 30.

Saia, Inc. SAIA carries a Zacks Rank #2 and has an earnings ESP of +4.08%. The company is scheduled to report its first-quarter 2015 results on Apr 29.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CH ROBINSON WWD (CHRW): Free Stock Analysis Report

VIRGIN AMERICA (VA): Free Stock Analysis Report

SAIA INC (SAIA): Free Stock Analysis Report

GLOBAL SHIP LS (GSL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

GSL SAIA CHRW

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More