C. H. Robinson Beats Street Consensus On Earnings Growth By Double Digits

What a difference a year makes. In the fourth quarter of 2017, at the height of the capacity crunch that sent trucking spot rates soaring, third-party logistics providers like C.H. Robinson Worldwide Inc CHRW saw margin compression in its brokerage operation, which sold capacity at low contracted rates and purchased it at spiking spot rates. But by the fourth quarter of 2018, contract rates had surpassed spot and the situation that brokerages found themselves in was a mirror-image of the challenging 

This afternoon after trading ended, North America's largest 3PL announced its financial results from Q4 2018.

Wall Street expected C.H. Robinson to improve its earnings per share (EPS) by 12 percent to $1.21; C.H. managed to outperform expectations and grow EPS by 24 percent to $1.34. Total revenues increased 4.5 percent to $4.1 billion for the quarter, and net revenues increased 13 percent to $713.8 million. 

"We are pleased with our financial results in 2018. We achieved record levels of net revenues and operating income and a 100-basis point increase in operating income margin. Led by our strong operating performance, we more than doubled our cash flow from operations and returned nearly $600 million to shareholders in 2018," said John Wiehoff, Chairman and Chief Executive Officer of C.H. Robinson. "Our strong 2018 financial results reflect the strength and hard work of our global network."

C.H. Robinson's NAST segment increased top line revenues year-over-year by 6 percent to $2.8 billion, and grew net revenues 13.5 percent to $471.4 million. Intermodal led the way for the division with a 76.4 percent increase in net revenue; truckload net revenues grew 13 percent; less-than-truckload net revenues grew 11.5 percent.

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The Global Forwarding segment also experienced double-digit growth year-over-year, but became somewhat less efficient as it increased top line revenue. Total revenues for the Global Forwarding business grew 14.5 percent to $677 million, but net revenues went up by 11.5 percent to $142 million. 

CHRW continues to optimize its legacy business Robinson Fresh, shrinking total revenues for that segment by 10.6 percent down to $531 million while growing net revenues by 18.8 percent to $64 million. Robinson Fresh reduced headcount by 5.1 percent, which offset higher compensation costs.

C.H. Robinson executives will host a conference call with equities analysts Wednesday morning. Stay tuned for our take on that conversation.

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