C.H. Robinson Worldwide posted strong growth in revenue and profits in the third quarter, helped by a lower tax rate and increased pricing in a capacity-constrained freight market.
The nation’s largest freight brokerage firm earned $175.9 million, or $1.25 a share, in the three months ended Sept. 30, compared with $119.2 million, or 85 cents a share, in the same period a year ago. Net revenue climbed 16.9% to $694 million from $593.8 million, and total revenue increased 13.4% to $4.29 billion from $3.78 billion.
“Our financial results reflects great execution by the employees across our global network,” CEO John Wiehoff said in a statement Oct. 30. “Truckload volume trends improved sequentially, and we delivered volume growth in many of our other service lines.”
The company’s North American Surface Transportation segment, which provides freight brokerage services, saw double-digit gains in revenue across all freight sectors due to higher rates, but shipment volumes were mixed with truckload volume declining 0.5%, less-than-truckload gaining 4.5% and intermodal slipping 6%.
Total revenue for NAST increased 18.7% to $2.93 billion in the third quarter of 2018 from $2.47 billion in 2017. Net revenue, which is total revenue minus purchased transportation costs, rose 23.3% to $465.5 million from $377.4 million.
Revenue and volume increased in the global forwarding segment, but profits and net revenue were squeezed by rising costs for purchased transportation. Total revenue increased 15.8% to $639.3 million, but net revenue rose only 3.3% to $134.1 million and operating profits sank 23.4% to $23.8 million in the third quarter of 2018 from a year earlier.
Robinson Fresh Produce, which arranges for transportation of fruits and vegetables from growers to restaurants and grocery stores, saw a decline in total revenue of 7.8% to $565.6 million in the third quarter of 2018 from $613.6 million in 2017, but net revenue grew 11.2% to $60.3 million and operating income surged 84.8% to $21.4 million.
Case volumes declined 9.5% in the quarter as a result of a strategic customer exiting the fresh produce business, lower levels of promotional activity by retail customers and lower restaurant traffic at food service outlets, the company said.
Based on overall results, C.H. Robinson said the business is generating significantly more cash from operations, some of which is being returned to shareholders in the form of dividends and share buybacks.
“Regardless of the freight environment, we build long-term committed relationships with shippers and carriers around the world and also fulfill spot market opportunities when they become available,” Wiehoff stated.
“Moving forward, we will continue our investments in digital transformation to expand the supply chain expertise we provide to our customers and carriers and drive operating efficiencies in our business. … I am confident that we have the right people, processes and technology to continue to win in the marketplace.”
C.H. Robinson, which is based in Minneapolis, ranks No. 4 on the Transport Topics Top 50 list of largest logistics companies in North America.