C.H. Robinson Reports Q2 Earnings, Revenue Spikes
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C.H. Robinson Worldwide saw a 34.6% increase in net income during the second quarter, the company reported July 27.
The Eden Prairie, Minn.-based logistics and shipping company posted earnings of $193.8 million, or $1.44 a diluted share, for the three months ending June 30. That compared with $143.9 million, $1.06, during the year-ago quarter. Total revenue increased 52.5% to $5.5 billion from $3.6 billion.
“We delivered record financial results by staying focused on serving the needs of our customers and keeping their global supply chains moving in a capacity-constrained environment,” CEO Bob Biesterfeld said during a call with investors. “We’re pleased that we returned to truckload volume growth.”
Biesterfeld
Biesterfeld added that the company saw record volumes in less-than-truckload, ocean and air. He noted that the largest services delivered year-over-year and sequential growth in total volumes, revenues and adjusted gross profit, which resulted in quarterly highs in total volumes, revenues, adjusted gross profit and operating income.
“In our largest service of [North American Surface Transportation] truckload, we grew our adjusted gross profit by $34 million,” Biesterfeld said. “In our second-largest service line of ocean forwarding, we grew our adjusted gross profit by $72 million or 92% year-over-year.”
He added that strong demand continued to outpace supply, with container and equipment shortages and other market disruptions also constraining capacity. Biesterfeld noted digital investments continue to bolster results by unlocking productivity gains and delivering customer value.
“Our three primary areas of investment in digitization are focused on creating value for customers, value for carriers and driving productivity improvement for our teams,” Biesterfeld said, “which in turn drives improvements to both our top-line results.”
The results surpassed expectations by Wall Street investment analysts, who had been looking for $1.31 per share and quarterly revenue of $4.94 billion, according to Zacks Consensus Estimate.
Year-over-year revenue by segment in the second quarter:
• NAST revenue increased 44.9% to $3.59 billion from $2.48 billion. Income from operations increased 10.4% to $151.1 million from $136.8 million. The segment includes truckload and less-than-truckload services.
The increase primarily was driven by higher truckload pricing and an increase in LTL and truckload shipments. Adjusted gross profit for truckload services increased 10.7% to $308 million from $278.4 million. LTL services increased 21.4% to $129.9 million from $107 million. The average truckload linehaul rate per mile increased approximately 42% in the quarter, while truckload linehaul cost per mile increased approximately 47.5%.
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• Global forwarding revenue rose 105% to $1.5 billion from $707.8 million. Income from operations increased 84.1% to $108.2 million from $58.8 million. The segment includes ocean and air services.
The increase in global forwarding revenue primarily was spurred by higher pricing in ocean services and higher volume in ocean and air services. This reflected a strong demand environment, market share gains and strained capacity. Adjusted gross profit for ocean increased 91.5% to $151 million from $78.9 million. Air increased 1.2% to $53.1 million from $52.4 million.
Stephens Inc. highlighted how earnings per share beat the consensus forecast and its own estimates of $1.35. The investment bank noted in a report that upside primarily was driven by continued strong results from the global forwarding division.
“Our sense is that the market broadly expected a global forward-driven beat and TL volume to increase in the mid-single digits, so we view the results as likely neutral to the stock,” Stephens analyst Jack Atkins said in the report. “We reiterate our equal-weight rating. Our estimates and price target are under review.”
UBS also focused on the importance of global forwarding, as well as NAST, in driving earnings per share above estimates. The global financial services firm noted that despite gross margin percent pressure in both segments the company still delivered strong net revenue growth.
“Gross revenue growth was strong and above our forecasts in both NAST and forwarding, which grew 45% and 105% [year-over-year] compared to our forecasts of 31% and 80% growth,” Tom Wadewitz, UBS senior equity research analyst, said in a report. “The greatest driver of upside EPS in 2Q was forwarding operating margin which was 730 [basis points] above our forecast and was only modestly offset by NAST operating margin 140 bp below our estimate.”
C.H. Robinson ranks No. 1 on the Transport Topics Top 50 list of the largest logistics companies in North America.
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