Reflecting an uncertain market for air cargo and forwarding activities, U.S.-based forwarder C.H. Robinson Worldwide released first-quarter results with some strong revenue figures, along with some lackluster activity in its airfreight sector.
For the three-month period ended March 31, C.H. Robinson reported an 8.4% rise in net revenues to US$678.8 million, compared to the same quarter in 2018, plus a 17.2% increase in net income from operations, year-over-year, totaling $224.6 million. These figures came from total revenues that fell 4.4%, y-o-y, to $3.8 billion, driven by “lower pricing across most transportation service lines.”
For its Global Forwarding segment, the company’s total revenues dropped 2.9%, y-o-y, to $537.6 million, due to lower prices in both ocean and air, but manage to see net revenues rise 3.4% during the same period, to $127.2 million. Net revenues in air increased slightly by 0.4%, as “margin expansion was largely offset by a decline in shipments.” Customs net revenues increased 5.9%, y-o-y, on higher volume growth. Meanwhile income from operations increased a remarkable 72.8% to $14.2 million, while operating margin expanded 450 basis points to 11.2%, the company said.
The Robinson Fresh perishables service reported a decrease in net revenues by 5.2 percent during the quarter to $28.7 million, which C.H. Robinson blamed on “weather-related crop reductions” that led to case volume declines.
“Our North American Surface Transportation [NAST] business generated double-digit net revenue growth in the quarter, and we delivered significant operating margin expansion in both our NAST and Global Forwarding businesses,” said John Wiehoff, chairman and CEO of C.H. Robinson, who will be retiring this month. “We continued to make improvements in working capital, which combined with increased earnings, allowed us to generate over $250 million in cash flow from operations and increase cash returns to our shareholders.”
Regarding its outlook for 2019, COO Bob Biesterfeld, who will assume the CEO role on May 8, said he expected continued market share expansion in 2019 and beyond, adding that C.H. Robinson “will continue to automate core processes and reduce our cost to sell and cost to serve.”
He added that the company is “firmly dedicated to operating margin expansion and believe our continued investments in technology will help enable us to achieve this objective,” and expects to “deliver annual double-digit growth in earnings per share over the long term.”