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C.H. Robinson Worldwide posted large gains in profits and revenue during the first quarter, driven by higher pricing and increasing cargo volume across most of its service lines.
The logistics and shipping company, based in Eden Prairie, Minn., said Q1 net income rose 121.8% to $173.3 million compared with $78.1 million in the same period a year earlier. Diluted earnings per share increased to $1.28 from 57 cents.
Revenue increased 26.3% to $4.8 billion from $3.8 billion in the same period a year earlier.
“The macro-environment in the first quarter continued to be one of tight capacity and increased pricing in the marketplace, driven by several supply-side constraints including the ongoing challenges of driver availability, coupled with robust demand,” CEO Bob Biesterfeld said during an April 27 conference call with investors and industry analysts.
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He said the company continues to “benefit from the tailwinds and some of the fastest-growing customer segments, including retail, e-commerce and manufacturing. We’re winning new business and growing our existing business with customers of all sizes.” Biesterfeld added he expects current market conditions to remain for the next several quarters.
The company expects to see truckload volume growth through the remainder of this year, and continues working to reprice its contracts to reflect high freight demand, he said.
Biesterfeld said spot freight pricing remains elevated relative to contract pricing, which he said, indicates that “there still is some potential upside in contractual pricing.” He estimated that the company would have repriced about 75% of its contract business from the fourth quarter of last year through the end of the current second quarter.
For the first quarter, C.H. Robinson’s North American Surface Transportation segment posted gains in revenue and operating profits. The segment’s revenue grew 13.7% to $3.2 billion compared with $2.8 billion in the same period a year earlier. Its operating profit jumped 38.8% to $136.8 million from $98.5 million. Higher truckload pricing and increased less-than-truckload shipments contributed to the gains.
Revenue and operating profits increased by large margins in the company’s Global Forwarding segment. Higher pricing for both ocean and airfreight contributed to the gain. The segment logged $1.2 billion in revenue during Q1, a 118% increase over $530 million in the same period a year earlier. The segment’s operating profit jumped 657.5% to $90.6 million compared with $12 million in the prior year’s quarter.
However, revenue for C.H. Robinson’s smaller business units — Robinson Fresh, Managed Services and Other Surface Transportation — fell in Q1, dipping 3.2% to $436.4 million from $450.1 million. Robinson Fresh operating profits decline by 9.1%, while Managed Services operating profits rose 13.4%. Profits at Other Surface Transportation fell 2.4%.
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