C.H. Robinson Misses 4Q, Revs Up - Analyst Blog
06 Februar 2013 - 2:30PM
Zacks
C.H. Robinson Worldwide
Inc. (CHRW) has reported fourth quarter 2012 adjusted
earnings per share of 68 cents, which fell short of the Zacks
Consensus Estimate by a couple of cents. Adjusted earnings
inched up 1.5% from 67 cents in the year-ago quarter. For fiscal
2012, earnings per share climbed 5.3% year over year to $2.76.
Total revenue in the fourth quarter
escalated 15.7% year over year to $2.97 billion, surpassing the
Zacks Consensus Estimate of $2.86 billion. Total revenue in the
full year increased 9.9% year over year to $11.4 billion.
Total operating expenses rose 35.6%
year over year to $311 million in the fourth quarter, resulting in
an operating ratio (operating expenses as a percentage of net
revenue) of 70%, up from 57.5%. Total operating expenses for the
year increased 10.9% year over year to $1,042 million. Total
operating ratio in fiscal 2012 was 60.7%, up from 57.6% a year
ago.
Segment
Details
Transportation: The
segment (comprising Truck, Intermodal, Ocean, Air and Other
logistics services) reported gross profit of $444.6 million in the
fourth quarter, up 10.8% from the year-ago period.
Gross profit from Truck (comprising
truckload and less-than-truckload services) increased 7.1% to
$328.3 million in the reported quarter, attributable to volume
growth and synergies arising from the acquisition of Apreo
Logistics S.A. in Oct 2012.
Gross profit from Intermodal fell
11.6% year over year to $9 million due to lower net revenue margin,
which was affected by increased cost of capacity.
Gross profit from Ocean soared 98%
to $33.7 million aided by Phoenix operations acquired in Nov
2012.
Air transportation gross profit
grew 81.1% year over year to $15.9 million primarily attributable
to decreased cost of capacity and increased pricing and Phoenix
acquisition.
Gross profit from other logistics
services registered a 37% year-over-year growth to $22.2 million on
the back of higher transaction fees and synergies arising from
acquisitions.
Sourcing: The segment’s
gross profit increased 11.3% year over year to $30.5 million
primarily on higher net revenue margin.
Payment
Services: The segment’s (comprising
income from subsidiary, T-Chek Systems Inc.) gross profit climbed
67.6% year over year to $4.9 million in the fourth quarter, driven
by divesture in T-Chek system.
Liquidity & Debt
Position
C.H. Robinson ended the year with
cash and cash equivalents of $210 million as against $373.7 million
in the year-ago period and had $253.6 million in debt on its
balance sheet compared to no debts last year. Cash from operations
rose to $460 million at the end of the year from $430 million a
year ago.
Other Stocks
Another logistic company,
Expeditors International of Washington Inc.(EXPD),
is expected to report its fourth-quarter results on Feb 26, before
the opening bell. The company has a Zacks Consensus Estimate of 43
cents for its fourth-quarter earnings.
Other stocks worth considering in
this sector include Grupo Aeroportuario del Pacifico S.A.B.
de CV (PAC) and Matson, Inc. (MATX). Both
these companies have a Zacks Rank #2 (Buy) rating.
Our Analysis
We believe C.H. Robinson’s asset
light model with diversified freight forwarding solutions provide
earnings flexibility in an economic downturn. The company’s
near-term growth is expected to be driven by synergies arising from
its acquisitions, expansion of US truckload brokerage, penetration
in the less-than-truckload and intermodal markets, expansion of
Transportation Management Center offerings and international
freight forwarding. However, factors like competitive freight
market, declining truckload market share and limited margin
expansion opportunities could restrict near-term growth.
C.H. Robinson Has Zacks Rank #3
(Hold).
CH ROBINSON WWD (CHRW): Free Stock Analysis Report
EXPEDITORS INTL (EXPD): Free Stock Analysis Report
MATSON INC (MATX): Free Stock Analysis Report
GRUPO AEROP-PAC (PAC): Free Stock Analysis Report
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