C.H. Robinson Worldwide Inc. Reports Operating Results (10-Q)

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Aug 09, 2010
C.H. Robinson Worldwide Inc. (CHRW, Financial) filed Quarterly Report for the period ended 2010-06-30.

C.h. Robinson Worldwide Inc. has a market cap of $11.64 billion; its shares were traded at around $66.89 with a P/E ratio of 30.68 and P/S ratio of 1.54. The dividend yield of C.h. Robinson Worldwide Inc. stocks is 1.49%. C.h. Robinson Worldwide Inc. had an annual average earning growth of 22.4% over the past 10 years. GuruFocus rated C.h. Robinson Worldwide Inc. the business predictability rank of 5-star.CHRW is in the portfolios of PRIMECAP Management, Ron Baron of Baron Funds, Bill Frels of Mairs & Power Inc. , Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, Chuck Royce of Royce& Associates, Paul Tudor Jones of The Tudor Group, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.

Highlight of Business Operations:

Due to margin compression, we did not achieve our long-term growth goal of 15 percent during the second quarter of 2010. Our net revenues increased 3.7 percent to $364.6 million. Our income from operations increased 4.4 percent to $156.5 million and our diluted earnings per share increased 9.3 percent to $0.59. During the second quarter, our net revenue margins (net revenues as a percentage of total revenues) decreased to 14.9 percent in 2010 from 18.3 percent in 2009. Net revenue margins decreased largely due to higher transportation costs and higher fuel prices, partially offset by increased pricing to our customers, exclusive of the impact of fuel.

Total revenues and direct costs. Our consolidated total revenues increased 27.4 percent in the second quarter of 2010 compared to the second quarter of 2009. Total Transportation revenues increased 32.0 percent to $2.0 billion in the second quarter of 2010 from $1.5 billion in the second quarter of 2009. This increase was driven by higher volumes in all of our transportation modes and increased pricing to our customers. Total purchased transportation services increased 40.0 percent in the second quarter of 2010 to $1.7 billion from $1.2 billion in the second quarter of 2009. This increase was due to higher volumes in all of our transportation modes, higher transportation costs, and higher fuel prices. Our Sourcing revenue increased 11.5 percent to $476.1 million in the second quarter of 2010. Purchased products sourced for resale increased 10.8 percent in the second quarter of 2010 to $435.3 million from $393.0 million in the second quarter of 2009. These increases

were primarily due to the previously announced acquisition of Rosemont Farms, Inc. (Rosemont) on September 15, 2009 and volume growth. Our Information Services revenue increased 22.1 percent to $14.0 million in the second quarter of 2010 from $11.4 million in the second quarter of 2009. The increase was driven by an increase in transactions and increases in some fees that are impacted by fuel prices.

For the second quarter, Sourcing net revenue increased 19.9 percent to $40.8 million in 2010 from $34.0 million in 2009. This increase was primarily due to the acquisition of Rosemont. Excluding the Rosemont acquisition, Sourcing net revenues increased approximately two percent in the second quarter of 2010, due to an increase in net revenue per case and increased volumes. Our margin increased to 8.6 percent in 2010 from 8.0 percent in 2009.

For the second quarter, other selling, general, and administrative expenses increased 8.0 percent to $54.1 million in 2010 from $50.1 million in 2009. Our acquisitions in 2009 added approximately $4.0 million of other selling, general, and administrative expenses for the second quarter of 2010. Additionally, we had reductions in our provision for doubtful accounts that were offset by increases in our warehouse, travel, and other expenses during the quarter.

Net Income. Net income increased 5.4 percent to $97.2 million for the three months ended June 30, 2010. Basic net income per share was $0.59 and $0.55 for the three months ended June 30, 2010 and 2009. Diluted net income per share was $0.59 and $0.54 for the three months ended June 30, 2010 and 2009.

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