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Yahoo
01-08-2025
- Business
- Yahoo
CH Robinson (CHRW) Climbs 18% on Strong Q2 Earnings
We recently published . C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) is one of the best-performing stocks on Thursday. CH Robinson snapped two straight days of losses on Thursday, jumping 18.1 percent to close at $115.32 apiece as investors cheered a strong earnings performance in the second quarter of the year. In its earnings statement, said net income increased by 20.8 percent to $152 million from $126 million in the same period last year, despite total revenues declining by 7.7 percent to $4.1 billion from $4.5 billion year-on-year due to the divestment of its Europe surface transportation business and lower pricing in ocean services and fuel surcharges in truckload services. Copyright: khunaspix / 123RF Stock Photo The first half also saw the company booking a 31.3-percent jump in net income at $288 million from $219 million, despite revenues dropping by 8 percent to $8.18 billion from $8.9 billion. 'When the current transformation of C.H. Robinson began in early 2024 with the implementation of a new Lean operating model, we recognized that some people had doubts and didn't understand how this would enable the company to change its trajectory. Now, with six consecutive quarters of consistent outperformance through the disciplined execution … there is no doubt in our minds that we are on the right path to deliver sustainable outperformance in all market cycles,' C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) President and CEO Dave Bozeman said. While we acknowledge the potential of CHRW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the .
Yahoo
31-07-2025
- Business
- Yahoo
At C.H. Robinson, improved profitability, productivity and a lot fewer workers
With a set of earnings in hand that drew praise from analysts, the second quarter financial report of C.H. Robinson highlighted another ongoing feature at the giant 3PL: the continuing drop in the number of people who work there. It was the company's performance that drew congratulations and praise from analysts on its earnings call Wednesday. That support was followed through in early trading Thursday, with C.H. Robinson (NASDAQ: CHRW) up 7.55% to $105.02 at approximately 8:15 a.m. EDT. With C.H. Robinson executives repeatedly using the word 'productivity' during its earnings call with analysts Wednesday, and with productivity at brokerages generally measured on some sort of measure of loads per employee, it brought into focus just how big the drop in employment at the company has been. The third quarter of 2023 marks the first full quarter after Dave Bozeman became CEO of C.H. Robinson. In that quarter, according to company data, there were 15,577 employees total at the company. Of that, 6,278 were in the North American Surface Transportation (NAST) segment, which includes the company's truck brokerage activities. In the just-completed second quarter, the average headcount for the company as a whole was 12,858, down 17.4% from the third quarter of 2023. At NAST, the drop was a smaller percentage, down 15.8%, which is a decline in employment to 5,283 from 6,278. During that time, revenues at C.H. Robinson and in NAST were largely flat, owing to still-weak freight markets. That is the definition of productivity increases: getting done the same amount of work or more with fewer inputs, including labor. And the trend is likely to continue. For example, in discussing the company's guidance for the rest of the year, Damon Lee, the company's CFO, said C.H. Robinson was reducing its guidance for personnel expenses by about $75 million on both the top and bottom end of its prior range of $1.375 billion to $1.475 billion. 'This reflects our disciplined approach to managing our cost structure and our ability to drive efficiency while positioning the organization for long-term growth, while remaining committed to further decoupling of head count from volume,' Lee said. Those changes might not need layoffs to be accomplished, based on Lee's further comment: 'With low to mid-teen turnover rates, we are well positioned to manage headcount, primarily through natural attrition, if needed.' But beyond that, the question was raised by an analyst on the earnings call: how much lower can you go? Michael Castagnetto, who is the president of NAST, answered with the consistent message that C.H. Robinson executives have not wavered from since Bozeman took over. 'We're going to get more productive every day, every week, every month,' Castagnetto said. And while some of that could come with further reductions in head count, Castangetto also discussed AI, specifically agentic AI, as a driver as well. Bozeman and others on the call cited numerous instances of productivity improvements brought on by AI that are allowing that reduction in headcount, including using AI to rapidly classify LTL freight under the new categorization regime in that sector implemented by the National Motor Freight Trucking Association. In ultimately responding to the question of 'how low can you go?,' Castagnetto replied: 'I don't believe I would buy the idea that there's a limit.' But he added: 'I think there's a ton of unknown.' Lee echoed that idea. 'We really don't see any future of a plateau and productivity for us,' he said. 'Our operating model is going to drive us to incremental evergreen productivity.' From the outsider's perspective, Jason Seidl of TD Cowen summed up the earnings and the headcount by saying that the margins at NAST 'quickly (moved) closer toward long term targets as tech initiatives continue to enable CHRW to do more with less.' At NAST, gross profits rose to $423.2 million from $419.7 million, a 3% gain. Other numbers at NAST showed improvement. The operating margin of 38% was better sequentially and year-on-year, and also, according to Seidl, beat forecasts. Market share gains C.H. Robinson's internal measurement showed the company gained market share during the quarter. According to the company, truckload volume per business day was up about 4.5% while LTL volume per business day rose 2.5%, numbers that exceeded the volume levels reported in the monthly Cass Index. Deutsche Bank analyst Richa Harnain noted that the 1% growth in NAST volumes exceeded not only the Cass index but also the volumes reported by the brokerage units of J.B. Hunt (NASDAQ: JBHT) and Knight Swift (NASDAQ: KNX). Tech keeping capacity alive? With C.H. Robinson's executives boasting of their own technology, an analyst asked them whether technology in general might be prolonging a market with excess capacity that was referred to several times as a continuing headwind. Castagnetto agreed there had been 'a democratization of freight brokerage tech over the last couple of years and there are plenty of folks offering capabilities out to smaller brokers.' He took the opportunity to tout C.H. Robinson's own technology. 'We believe that there is a clear differentiation between what we do in the marketplace and our competition, whether that competition or assets, large brokers or small brokers,' Castagnetto said. But then he took issue with the thesis: 'I'm not sure I would agree maybe with your sentiment on (tech) being a driver of keeping capacity in the marketplace.' 'I would acknowledge the democratization of freight brokerage tech, but we believe our tech stack, combined with our people, is a clear differentiator for us in the marketplace' Castagnetto added. Other issues raised in the earnings call: –With a freight market down for so long, brokerages run the risk of an upturn that leaves them facing higher spot rates to secure capacity against lower-priced contracts to move a customer's freight. Arun Rajan, chief strategy and innovation officer, said C.H. Robinson believes the technology changes it has made can carry it through that period when rates rise, or in broker parlance, 'inflect.' 'Through…rigor, we've also improved our ability to manage the short-term gross margin compression that typically comes with a spot rate inflection, such that we are confident in our ability to shorten the time and reduce the impact of any margin compression compared to historical spot rate inflections,' Rajan said. 'Over a 12-month time frame, we expect a stronger demand and/or reduction of excess capacity that leads to a spot rate inflection to outweigh any short-term margin compression that may occur. In this regard, we believe our outperformance will continue as spot rates inflect.' –It doesn't sound like acquisitions are high on the list of priorities at C.H. Robinson, though Lee said 'we're kicking the tires on inorganic opportunities I would say every week.' C.H. Robinson is an investment-grade credit, but just by two notches. The company remains a dividend aristocrat, having reached that vaunted level just a few years ago by having increased its dividend payout at least 25 consecutive years. Along with keeping that investment grade rating, 'maintaining and growing our dividend are top priorities,' Lee said, without noting the reality that an acquisition gone wrong can often be damaging to a company's debt rating. And besides, as Lee said, 'the organic opportunities we have internally certainly are attractive.' The door isn't closed to an acquisition, Lee said. 'We're not going to make a mistake on M&A,' he said. If the company does a deal, 'it will be the right acquisition, and when it is the right acquisition, we'll pull the trigger.' More articles by John Kingston Averitt pay increase could be a sign of some acceleration in driver wages Sequential numbers at diversified trucking operator TFI International may mark a turnaround Ryder's used vehicle numbers show a bullish corner: tractor sales The post At C.H. Robinson, improved profitability, productivity and a lot fewer workers appeared first on FreightWaves.
Yahoo
30-07-2025
- Business
- Yahoo
C.H. Robinson Worldwide (NASDAQ:CHRW) Misses Q2 Sales Targets
Freight transportation intermediary C.H. Robinson (NASDAQ:CHRW) fell short of the market's revenue expectations in Q2 CY2025, with sales falling 7.7% year on year to $4.14 billion. Its non-GAAP profit of $1.29 per share was 11.4% above analysts' consensus estimates. Is now the time to buy C.H. Robinson Worldwide? Find out in our full research report. C.H. Robinson Worldwide (CHRW) Q2 CY2025 Highlights: Revenue: $4.14 billion vs analyst estimates of $4.16 billion (7.7% year-on-year decline, 0.6% miss) Adjusted EPS: $1.29 vs analyst estimates of $1.16 (11.4% beat) Adjusted EBITDA: $217.6 million vs analyst estimates of $219.1 million (5.3% margin, 0.7% miss) Operating Margin: 5.2%, up from 4% in the same quarter last year Free Cash Flow Margin: 0%, down from 3.3% in the same quarter last year Market Capitalization: $11.85 billion "When the current transformation of C.H. Robinson began in early 2024 with the implementation of a new Lean operating model, we recognize that some people had doubts and didn't understand how this would enable the company to change its trajectory. Now, with six consecutive quarters of consistent outperformance through the disciplined execution of the strategy that we shared at our 2024 Investor Day, there is no doubt in our minds that we are on the right path to deliver sustainable outperformance in all market cycles," said President and Chief Executive Officer, Dave Bozeman. Company Overview Engaging in contracts with tens of thousands of transportation companies, C.H. Robinson (NASDAQ:CHRW) offers freight transportation and logistics services. Revenue Growth Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, C.H. Robinson Worldwide's sales grew at a sluggish 2.4% compounded annual growth rate over the last five years. This was below our standards and is a rough starting point for our analysis. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. C.H. Robinson Worldwide's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 8% annually. C.H. Robinson Worldwide isn't alone in its struggles as the Air Freight and Logistics industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time. C.H. Robinson Worldwide also breaks out the revenue for its most important segments, North American surface transportation and Global Forwarding, which are 70.5% and 19.3% of revenue. Over the last two years, C.H. Robinson Worldwide's North American surface transportation revenue (transportation brokerage) averaged 8.6% year-on-year declines while its Global Forwarding revenue (worldwide ocean, air, customers ) was flat. This quarter, C.H. Robinson Worldwide missed Wall Street's estimates and reported a rather uninspiring 7.7% year-on-year revenue decline, generating $4.14 billion of revenue. Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. Although this projection indicates its newer products and services will spur better top-line performance, it is still below the sector average. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Operating Margin Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. C.H. Robinson Worldwide's operating margin has been trending up over the last 12 months and averaged 4.3% over the last five years. The company's higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports lousy profitability for an industrials business. This result isn't too surprising given its low gross margin as a starting point. Looking at the trend in its profitability, C.H. Robinson Worldwide's operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. C.H. Robinson Worldwide's performance was poor, but we noticed this is a broad theme as many similar Air Freight and Logistics companies saw their margins fall (along with revenue, as mentioned above) because the cycle turned in the wrong direction. This quarter, C.H. Robinson Worldwide generated an operating margin profit margin of 5.2%, up 1.2 percentage points year on year. Since its gross margin expanded more than its operating margin, we can infer that leverage on its cost of sales was the primary driver behind the recently higher efficiency. Earnings Per Share We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. C.H. Robinson Worldwide's EPS grew at an unimpressive 7.8% compounded annual growth rate over the last five years. This performance was better than its flat revenue but doesn't tell us much about its business quality because its operating margin didn't improve. Diving into the nuances of C.H. Robinson Worldwide's earnings can give us a better understanding of its performance. A five-year view shows that C.H. Robinson Worldwide has repurchased its stock, shrinking its share count by 10.8%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For C.H. Robinson Worldwide, its two-year annual EPS growth of 2.7% was lower than its five-year trend. We hope its growth can accelerate in the future. In Q2, C.H. Robinson Worldwide reported adjusted EPS at $1.29, up from $1.15 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects C.H. Robinson Worldwide's full-year EPS of $4.95 to stay about the same. Key Takeaways from C.H. Robinson Worldwide's Q2 Results It was encouraging to see C.H. Robinson Worldwide beat analysts' EPS expectations this quarter. We were also glad its Global Forwarding revenue topped Wall Street's estimates. On the other hand, its consolidated revenue slightly missed and its EBITDA also fell slightly short of Wall Street's estimates. Zooming out, we think this was a mixed quarter. The stock remained flat at $97.40 immediately after reporting. Should you buy the stock or not? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-07-2025
- Business
- Yahoo
First Look: Profitablity measures at C.H. Robinson point higher in 2Q
C.H. Robinson CEO Dave Bozeman (NASDAQ: CHRW), in releasing the company's second quarter earnings, said it represented 'six consecutive quarters of consistent outperformance through the disciplined execution of the strategy that we shared at our 2024 investor day.' The revenue figure for the company was down, in part because of the divestiture of the company's European Surface Transportation business, which housed the basic truck brokerage activities of the company. The decline was 7.7%. The figure for gross profits was up 0.4% to $679.6 The adjusted operating margin was up 520 bps to 31.1%. That also marked a significant sequential jump from 26.3%. Income from operations was up 21.2% year on year, to $215.9 million. In the first quarter, that figure was about $177 million. C.H. Robinson continues to slash headcount. Total average employee headcount in the second quarter was 12,858, down 11.2% from a year earlier. In the first quarter, that number was 13,347. The North American Surface Transport sector, which contains its brokerage operations, saw its profitability rise even as it produced less revenue. Total revenue in NAST was down 2.4% for the quarter compared to the year earlier period. But adjusted gross profits rose 3% year-on-year, and income from operations were up 16.2%. Average headcount at NAST was 5,283, down from 5,868 a year earlier. It was actually up by 3 from the first quarter. Adjusted net income of $1.29/share was up 12.2% from a year ago, and was 13 cts/share more than the consensus estimate, according to SeekingAlpha. Revenue of $4.14 billion was short of consensus estimate by $40 million. C.H. Robinson's stock is up 9.3% in the last 52 weeks. Post-market trading was light but suggested a positive reaction to the report. C.H. Robinson closed the day at $97.65, with reports afterward of the stock price hitting the $100 mark. More articles by John Kingston Sequential numbers at diversified trucking operator TFI International may mark a turnaround Ryder's used vehicle numbers show a bullish corner: tractor sales Five takeaways from the State of Freight for July: What earnings and the indices are saying about the market The post First Look: Profitablity measures at C.H. Robinson point higher in 2Q appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
12-06-2025
- Business
- Yahoo
Onstage in Chicago, CHRW talks tech and staffing; RXO sees language order hitting capacity
With two leading 3PLs taking the stage at the Wells Fargo Industrials and Materials Conference in Chicago Wednesday, in the middle of a freight market that still has not made their lives any easier, presenters from C.H. Robinson and RXO made their case in different ways. They did so from very different positions in the equity markets: C.H. Robinson's stock by Wednesday had risen about 11.6% in the last year. RXO's stock declined about 21.7% during that same period. There was one major overlap in what the two publicly-traded 3PLs said about the market: neither are banking on any significant upturn anytime soon. C.H. Robinson (NASDAQ: CHRW) CEO Dave Bozeman said the freight market is still in what is now a 38 to 39-month recession, 'and we have to deal with it and that's what we're doing every day.'Drew Wilkerson, the CEO of RXO (NYSE: RXO), citing several measures such as tender rejections, said 'we feel like we're coming off the bottom.' But it was other areas that stood out in the presentations for the two companies. (Both companies' presentations were webcast.) Given that it has been technology and productivity that C.H. Robinson has touted as the key driver to its success, which began showing up in its corporate earnings after the first quarter of 2024, it wasn't surprising that Bozeman and CFO Damon Lee turned to that topic in their discussion. The RXO discussion with Wilkerson and head of strategy Jared Weisfeld was more focused on the freight market. But one reason for their guarded optimism was a potential strengthening through a potential boost from enforcing the Department of Transportation's English language C.H. Robinson, some of the gains at the company have come alongside reductions in staff. Although the precise numbers are not known, they showed up in the most recent quarterly earnings report under the category of personnel expenses. In the first quarter of 2024, that spending was $379.1 million. In the first quarter of this year, it had been reduced to $348.6 million. Lee said the question about the company's head count is one that they get 'a lot.' 'But we don't really look at it that way,' he said. 'We look at it as productivity.' The key metric the company uses to measure that productivity is shipments per day per person. In the company's most recent quarterly earnings call, Michael Castagnetto, president of C.H. Robinson's North American Surface Transportation unit that is the home of its truck brokerage activities, said the segment's shipments per person per day has been growing at a double-digit pace in the past two years. He said that pace continued in the first quarter. 'If I've set a target for operating leverage and volume goes up, I may actually add a head or two,' Lee said. But given the environment in the freight market, Lee said that reducing head count at present is 'what the productivity drives us to do.' Continuing reductions in headcount are not guaranteed, according to Lee. 'Assuming volumes return to the system at some point, that productivity will show up either as head count reduction, like we've seen in this freight recession, or it will show up as increased operating leverage when volume returns.' 'Our head count reductions have not been blind,' Lee said. 'They've been very systematic. It hasn't been 'will I just reduce workforce by 10%.'' The 'vast majority' of head count has come on the customer-facing side, Lee said, 'where we're moving up the value stack with the customers.'He added that questions from investors and analysts often come down to 'how do we know you're not just going to flood people back when the volume returns?' 'Our answer is there's no reason to flood people back,' Lee said. 'The processes have fundamentally changed. The process that required a human touch before no longer requires the human touch.' Both Lee and Bozeman said the company believes the model it has created during difficult times, based on Lean principles, will 'translate' in a stronger market as well. Bozeman has talked frequently about a push by C.H. Robinson to get deeper into small and medium businesses. Lee said the productivity gains elsewhere in the company has allowed it 'to invest in that space, in bringing people in from a customer facing perspective.' Wednesday began with a report published by Jason Seidl of TDCowen, who had met with RXO officials in Canada. Seidl said those officials–who were not identified in the report–had made the point that the enforcement of the Department of Transportation English language requirement that will begin next week could have a significant impact on trucking capacity. Wilkerson raised that subject in his discussion at the Wells Fargo conference. 'I think it will have a big impact if it goes into effect,' Wilkerson said. But where the impact falls is not likely to be evenly distributed, he added. There will be a clear political divide on where the law could affect capacity. 'Watch the red states first, because this is something that would happen at a state level,' Wilkerson said. 'So does something happen in Texas? Does something happen in Florida? Does something happen in Tennessee, which are all highly-trafficked areas?' RXO, according to Wilkerson, believes the size of the driver capacity that would not pass the English language requirement 'could be anywhere to low double digits.' In his report, Seidl said he believed the industry is estimating that number to be between 5% and 15%. Wilkerson, in his remarks, said the continuing sluggishness of freight markets is now more of a demand issue than one of supply, because the departure of so many carriers and owner operators has tightened capacity. 'So whenever you talk about demand returning, there is not as much capacity,' he said. Given that, he said, a significant loss of more capacity because of enforcement of the English language requirement would result in a 'sharper turn in the recovery.' Westerfield said he sees 'pretty significant coordination' among government agencies like FMCSA to implement the executive order. He added that if a driver can not show proficiency in tasks like reading signs, the penalty is not a fine; it is having that driver and truck taken out of service. 'But it comes down to enforcement, which will be down at a state by state level,' Westerfield said. 'So that really speaks to regional dynamics.' Seidl's brief comment in his report was that he believed the executive order will be 'difficult to enforce.' More articles by John Kingston C.H. Robinson – and 3PL industry – win another broker liability case in 7th Circuit Leadership at C.H. Robinson celebrates 1-year milestone by posting another strong quarter RXO finds positives in quarter marked by soft market and profit loss The post Onstage in Chicago, CHRW talks tech and staffing; RXO sees language order hitting capacity appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
