However, the Eden Prairie, Minn.-based third-party logistics provider’s revenues for the quarter surged 12.4 percent year-over-year, driven by volumes growth across all transportation services.
C.H. Robinson recorded a net income of $111.1 million for the second quarter of 2017, tumbling 22.4 percent from last year’s second quarter, the company reported.
The Eden Prairie, Minn.-based third-party logistics provider’s earnings per share (EPS) totaled $0.78 for the quarter, $0.12 per share lower than the Zacks consensus estimate, and down sharply from $1.00 per share a year prior.
“Our results were significantly impacted by truckload margin compression,” said C.H. Robinson Chairman and CEO John Wiehoff. “Purchased transportation costs increased significantly during the quarter, while much of our customer pricing is committed at relatively flat prices.”
“Selling long to shippers while buying short from carriers always has had the potential to squeeze margins, but this quarter, the phenomenon wreaked havoc with the company’s profitability,” investment bank Stifel added.
On a brighter note, C.H. Robinson increased revenues 12.4 percent year-over-year during the quarter to $3.71 billion, fueled by volumes growth across all transportation services.
C.H. Robinson averaged 14,620 employees during the quarter, up 8.1 percent year-over-year, averaging 7,003 employees in the North American Surface Transportation segment, 4,021 employees in the Global Forwarding segment, 980 employees in the Robinson Fresh segment, and 2,616 employees in the all other and corporate segment (including personnel from shared services, managed services, other surface transportation, and other miscellaneous operations).
Looking ahead, investment firm Stifel said it is dropping its 2017 EPS estimate for C.H. Robinson from $3.55 per share to $3.30 per share, its 2018 estimate from $3.80 per share to $3.60 per share, and its 2019 estimate from $4.15 per share to $3.95 per share.
Stifel said it lowered its estimates because it believes the level of competition in the truckload brokerage space is heating up, the increased level of unwillingness on the part of shippers to support price increases in the marketplace, the possibility that federal legislation will delay the implementation of the electronic logging device mandate for two years, and because it believes economic growth is not likely to accelerate much.
C.H. Robinson net income drops 22.4% in Q2 2017
