C.H. Robinson impresses with solid performance in difficult times

The logistics and transport specialist C.H. Robinson Worldwide was able to present an impressive quarterly result through stringent cost control and exceeded analysts’ profit estimates. However, this did not prevent revenues from slightly falling short of expectations. Investors reacted positively nonetheless, sending C.H. Robinson’s shares up by 15%. The current market situation is particularly challenging for transport companies. Due to economic uncertainties, many large shipping customers have reduced their orders, which lowers the demand for transport services. Despite these adversities, C.H. Robinson proved to be well-prepared. The company recorded a second-quarter profit of $1.15 per share on revenues of $4.5 billion, surpassing the estimated $0.96 per share even though revenue was approximately $30 million below consensus estimates. Revenue increased by only 1.4% year-over-year; however, C.H. Robinson was able to reduce operating expenses by 4.4%. This resulted in a 3% increase in gross profit and a 600 basis point increase in the adjusted operating margin. “While we continue to navigate through an extended freight recession, we are currently performing better,” said CEO Dave Bozeman. “Our truckload business has gained market share for the fourth consecutive quarter, with a focus on margin improvements.” Higher pricing levels in the ocean freight sector offset the weakness in the domestic truckload business, leading to a solid outcome for the company. Geopolitical tensions and disruptions in Red Sea shipping routes are driving prices up and are expected to maintain this trend initially. C.H. Robinson enjoys a reputation as a top operator in its industry and has demonstrated in the second quarter how to successfully navigate an adverse macroeconomic environment. There are no indications that the company cannot continue to deliver above-average performance. However, before investing in C.H. Robinson Worldwide, you should consider the following: The analyst team from The Motley Fool Stock Advisor recently identified the 10 best stocks that investors should buy right now – and C.H. Robinson Worldwide was not among them. The 10 stocks that made the list could significantly increase in value in the coming years. For example, Nvidia was on this list on April 15, 2005. Anyone who invested $1,000 in the stock then would have $717,050 today!* The Motley Fool’s Stock Advisor offers investors an easy blueprint for success, including guidelines for building a portfolio, regular analyst updates, and two new stock recommendations per month. Since 2002, the Stock Advisor service has outperformed the S&P 500 more than fourfold*.