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C.H. Robinson Worldwide Inc - Stock Quote CHRW

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Morningstar's C.H. Robinson Worldwide Inc Stock Analysis

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C.H. Robinson Posts Solid Overall Growth in Q1; Truck Brokerage Net EBIT Margins Rebound Nicely

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

Tailwinds from heavy retailer restocking and favorable pricing conditions (tight trucking and airfreight market capacity) continued in C.H. Robinson’s first quarter. Gross revenue (up a strong 42%) came in nicely ahead of our expectations for both truck brokerage, or NAST, and global forwarding. NAST’s gross profit margin percentage (net revenue/gross revenue) came in shy of our forecast, but that’s partly because soaring fuel surcharges artificially suppress margin. Also, gross margin improved sequentially on progress repricing contractual truckload business. We expect continued sequential gains, especially if TL-market spot rates continue to ease, providing relief from historically high capacity buy rates. Total net revenue (adjusted gross profit) surged 29%, though the increase came in below gross revenue growth because of lower global forwarding and NAST gross margin percentages. Even so, this dynamic is not unexpected in very tight markets when cost of hire spikes.

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C.H. Robinson Worldwide Inc's Company Profile

Business Description

C.H. Robinson is a top-tier non-asset-based third-party logistics provider with a significant focus on domestic freight brokerage (57% of 2021 net revenue), which reflects mostly truck brokerage but also rail intermodal. Additionally, the firm also operates a large air and ocean forwarding division (34%), which has grown organically and via tuck-in acquisitions. The remainder of revenue consists of the European truck-brokerage division, transportation management services, and a legacy produce-sourcing operation.

14701 Charlson Road
Eden Prairie, MN, 55347-5088
T +1 952 937-8500
Sector Industrials
Industry Integrated Freight & Logistics
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Cyclical
Employees 17,258

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