C.H. Robinson Reports 55.7% Earnings Surge for Q4
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C.H. Robinson Worldwide saw net income soar during the fourth quarter of 2021, the company reported Feb. 2.
The Eden Prairie, Minn.-based logistics and shipping company posted net income of $230.1 million, or $1.74 a diluted share, for the three months ending Dec. 31, compared with $147.8 million, $1.08, during the same time the previous year. Total revenue increased 42.9% to $6.5 billion from $4.5 billion.
According to Zacks Consensus Estimate, analysts had expected Q4 EPS of $1.93 per share and quarterly revenue of $6.15 billion.
For the year, C.H. Robinson reported net income of $844.2 million, $6.31, on revenue of $23.1 billion, compared with net income of $506.4 million, $3.72, on revenue of $16.2 billion in 2020.
“Within our industry, 2021 will be remembered as a year with some of the greatest disruption and tightest capacity ever seen,” company president Bob Biesterfeld said during a Feb. 2 conference call. “For me it will be remembered as a year in which the global supply chain was at the forefront of conversations, and where our organization effectively helped our customers and carriers navigate the unprecedented level of supply chain disruption.”
Biesterfeld added, “The positive momentum of our business remains strong, as demand for our global suite of services and for our digital freight platform continues to grow.”
The company also pointed to its “tech-plus” strategy, which aims to leverage transportation-related technologies with global expertise, local knowledge and service. Biesterfeld noted the strategy continued to be a key differentiator for the company by enabling it to help customers and carriers navigate supply chain disruptions.
The company’s North American Surface Transportation segment reported Q4 revenue increased 26.1% to $3.9 billion from $3.09 billion the prior year. Income from operations decreased 1.4% to $148.4 million from $150.6 million last year.
Breaking: C.H. Robinson announces record financial results for 2021, delivering strong performance as the company navigated unprecedented challenges in the global supply chain https://t.co/S2QnDxNXmn#earnings $CHRW pic.twitter.com/O0UtCukeTn — C.H. Robinson (@CHRobinson) February 2, 2022
The segment includes truckload and less-than truckload operations. The truckload service reported a 22.3% increase in adjusted gross profits to $339.5 million from $277.5 million, while LTL reported an 18.3% increase in adjusted gross profits to $139.5 million from $117.9 million.
The overall NAST results were driven by higher truckload and LTL pricing, as well as an increase in truckload shipments. The average Q4 truckload linehaul rate per mile charged increased approximately 18.5%, and truckload linehaul cost per mile increased approximately 18%.
Operating expenses increased 32.7%, primarily due to higher incentive compensation and a higher head count.
“In our NAST truckload business we saw strong demand for our services with a 6% year-over-year volume growth in the fourth quarter,” Biesterfeld said. “Our adjusted gross profit, or AGP, per load continued to improve in both truckload and LTL as we repriced more of our contractual portfolio and focused on profitable market share. This repricing enabled us to reduce the amount of truckloads with negative margins in Q4 to the lowest levels since Q2 of 2020.”
Biesterfeld noted that while those levels remain above historical averages, the company remains focused on further reductions. He also noted Q4 was the third consecutive quarter where the company delivered year-over-year growth in both NAST truckload volume and NAST truckload AGP. He argued that this demonstrated balanced growth in an extremely tight market.
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“During the fourth quarter, we had an approximate mix of 55% contractual volume and 45% transactional volume in our truckload business, which is consistent with our mix in the year ago period,” Biesterfeld said.
The Global Forwarding segment reported Q4 revenue surged 108.1% to $2.14 billion from $1.03 billion the prior year. Income from operations jumped 151% to $146.8 million from $58.5 million. The segment includes ocean, air and customs operations.
- The ocean service line reported an 86.6% increase in adjusted gross profits to $209.8 million from $112.4 million.
- The air service line reported an 84.1% increase in adjusted gross profits to $65.8 million from $35.7 million.
- The customs service line reported a 5.7% increase in adjusted gross profits to $25.3 million from $24 million.
The Global Forwarding segment results were primarily driven by higher pricing and higher volume in both ocean and air services, which reflected a strong demand environment, market share gains and strained capacity, the company said. Operating expenses increased 33.9% because of an increase in salaries, incentive compensation and technology expenses.
C.H. Robinson ranks No. 1 on the Transport Topics Top 50 list of the largest logistics companies in North America.