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Will Freight Demand Boost C.H. Robinson (CHRW) Q2 Earnings?
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C.H. Robinson Worldwide, Inc. (CHRW - Free Report) is scheduled to report second-quarter 2018 financial numbers on Jul 31, after the closing bell.
In the first quarter of 2018, the company’s earnings per share of $1.01 surpassed the Zacks Consensus Estimate of 99 cents. The bottom line also improved 17.4% on a year-over-year basis. Total revenues increased 14.9% year over year to $3,925.3 million, which outpaced the Zacks Consensus Estimate of $3,808.8 million.
Additionally, the company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 3.2%. The continuous bottom-line outperformance is well reflected in C.H. Robinson’s price performance. In a year’s time, the stock has rallied 40.8% compared with its industry’s 3.1% increase.
One-Year Price Performance
We expect C.H. Robinson to continue with its impressive trend pertaining to the bottom line in the second quarter of 2018 driven by a strong freight market.
Our quantitative model too points at an earnings beat in the soon-to-be-reported quarter. Here's why:
C.H. Robinson has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — which increases the odds of an earnings surprise.
Earnings ESP : C.H. Robinson hasan Earnings ESP of +0.79% as the Most Accurate Estimate of $1.07 is a penny higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: C.H. Robinson carries a Zacks Rank #3, which when combined with a positive ESP makes us confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Likely at Play
Increased freight demand is expected to boost C.H. Robinson’s second-quarter results. Meanwhile, rising freight prices is a major positive for the company. Also, improvement in operating cash flow is encouraging.
The transportation sector (comprising Truckload, Intermodal, Less-than-Truckload, Ocean, Air, Customs and Other logistics services) is likely to perform well in the second quarter backed by increased pricing and other positives. The Zacks Consensus Estimate for transportation revenues stands at $614 million, higher than $539 million reported a year ago.
Additionally, reduced tax rate, courtesy of the new tax law should aid the bottom line in the soon-to-be reported quarter. We are also impressed by the company’s growth-by-acquisition strategy, which has expanded its portfolio and augmented its top line. The expanded portfolio should result in year-over-year revenue growth in the second quarter.
However, we expect high operating expenses to hurt C.H. Robinson's results. Escalated personnel and SG&A costs are anticipated to result in higher operating expenses. The intermodal sub-group is likely to struggle in the soon-to-be reported quarter due to high costs.
C.H. Robinson Worldwide, Inc. Price and EPS Surprise
Investors interested in the broader Transportation sector may check out a few better-ranked stocks from the same space like Expeditors International of Washington, Inc. (EXPD - Free Report) , GOL Linhas Aereas Inteligentes S.A. and Hub Group, Inc. (HUBG - Free Report) as these too possess the right combination of elements to beat estimates in their next releases.
GOL Linhas has an Earnings ESP of +1.89% and a Zacks Rank of 3. The company will report second-quarter earnings on Aug 2.
Hub Group has an Earnings ESP of +1.96% and a Zacks Rank #2. The company will report second-quarter earnings on Aug 1.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Will Freight Demand Boost C.H. Robinson (CHRW) Q2 Earnings?
C.H. Robinson Worldwide, Inc. (CHRW - Free Report) is scheduled to report second-quarter 2018 financial numbers on Jul 31, after the closing bell.
In the first quarter of 2018, the company’s earnings per share of $1.01 surpassed the Zacks Consensus Estimate of 99 cents. The bottom line also improved 17.4% on a year-over-year basis. Total revenues increased 14.9% year over year to $3,925.3 million, which outpaced the Zacks Consensus Estimate of $3,808.8 million.
Additionally, the company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 3.2%. The continuous bottom-line outperformance is well reflected in C.H. Robinson’s price performance. In a year’s time, the stock has rallied 40.8% compared with its industry’s 3.1% increase.
One-Year Price Performance
We expect C.H. Robinson to continue with its impressive trend pertaining to the bottom line in the second quarter of 2018 driven by a strong freight market.
Our quantitative model too points at an earnings beat in the soon-to-be-reported quarter. Here's why:
C.H. Robinson has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — which increases the odds of an earnings surprise.
Earnings ESP : C.H. Robinson hasan Earnings ESP of +0.79% as the Most Accurate Estimate of $1.07 is a penny higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: C.H. Robinson carries a Zacks Rank #3, which when combined with a positive ESP makes us confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Likely at Play
Increased freight demand is expected to boost C.H. Robinson’s second-quarter results. Meanwhile, rising freight prices is a major positive for the company. Also, improvement in operating cash flow is encouraging.
The transportation sector (comprising Truckload, Intermodal, Less-than-Truckload, Ocean, Air, Customs and Other logistics services) is likely to perform well in the second quarter backed by increased pricing and other positives. The Zacks Consensus Estimate for transportation revenues stands at $614 million, higher than $539 million reported a year ago.
Additionally, reduced tax rate, courtesy of the new tax law should aid the bottom line in the soon-to-be reported quarter. We are also impressed by the company’s growth-by-acquisition strategy, which has expanded its portfolio and augmented its top line. The expanded portfolio should result in year-over-year revenue growth in the second quarter.
However, we expect high operating expenses to hurt C.H. Robinson's results. Escalated personnel and SG&A costs are anticipated to result in higher operating expenses. The intermodal sub-group is likely to struggle in the soon-to-be reported quarter due to high costs.
C.H. Robinson Worldwide, Inc. Price and EPS Surprise
C.H. Robinson Worldwide, Inc. Price and EPS Surprise | C.H. Robinson Worldwide, Inc. Quote
Stocks to Consider
Investors interested in the broader Transportation sector may check out a few better-ranked stocks from the same space like Expeditors International of Washington, Inc. (EXPD - Free Report) , GOL Linhas Aereas Inteligentes S.A. and Hub Group, Inc. (HUBG - Free Report) as these too possess the right combination of elements to beat estimates in their next releases.
Expeditors has an Earnings ESP of +1.54% and a Zacks Rank #2 (Buy). The company will report second-quarter earnings on Aug 7. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GOL Linhas has an Earnings ESP of +1.89% and a Zacks Rank of 3. The company will report second-quarter earnings on Aug 2.
Hub Group has an Earnings ESP of +1.96% and a Zacks Rank #2. The company will report second-quarter earnings on Aug 1.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>