C.H. Robinson Profits Drop in Fourth Quarter But Beat Earnings Forecasts
C.H. Robinson Worldwide began the third-party logistics reporting season with a 3.4% decline in profits for the fourth quarter compared with 2015 but fared better than the forecast outcome from industry analysts.
Net income for the freight broker was $122.3 million, or 86 cents per share. In the year prior, the total was $126.6 million, or 88 cents.
Gross revenue, or the amount before paying for trucking, rail or airfreight services, rose 6.4% to $3.41 billion. When transportation expenses were deducted, net revenue declined 1.6% year-over-year to $561.5 million.
C.H. Robinson ranks No. 4 on the Transport Topics Top 50 list of the largest logistics companies in North America, which uses net revenue as a metric.
The biggest net revenue declines were in the truckload and intermodal services, but the less-than-truckload market improved. Truckload, the largest freight brokerage offering, dropped 12% to $296.7 million in net revenue versus 2015. Intermodal, the smallest service, had a 15% decline to $7.5 million. Less-than-truckload, the second largest unit, improved 5.2% to $94.3 million. Other smaller services, such as ocean, air and customs brokerage, improved by double digits.
The North American Surface Transportation unit, which handles truckload, LTL and intermodal, reported operating income dropped 14% to $157.6 million after all expenses were deducted from revenues. The Eden Prairie, Minnesota, logistics provider blamed truckload margins for the results.
The Global Forwarding division, which provides ocean freight services, airfreight services and customs brokerage, fared much better but is a much smaller contributor to the bottom line. Operating income improved 32% to $24.6 million.
Expenses jumped 22.3% to $107.6 million for other selling, general and administrative costs, including a growth in claims, bad debt provision and the APC Logistics acquisition Sept. 30.
C.H. Robinson came out 2 cents ahead of the consensus forecast, according to a Bloomberg News survey of analysts. It also beat predictions on gross revenue and overall profits.
