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C.H. Robinson Worldwide Inc. on July 27 reported record second-quarter profits as a strong pricing environment lifted results.
The Phoenix, Ariz.-based company posted Q2 net income of $348.2 million, or $2.67 a diluted share, for the three months ending June 30. That is a 79.7% increase compared with $193.8 million, $1.44, during the same time the previous year. Total revenue increased by 22.9% to $6.8 billion from $5.53 billion, which it attributed primarily to higher pricing across most services, along with higher truckload and ocean volume.
“Our second quarter was another quarter of record profits, as our business model performed as we would expect it to in this part of the cycle,” C.H. Robinson CEO Bob Biesterfeld said in a statement. “Investments in our customer relationships through the early part of the cycle, while the cost of purchased transportation was rapidly increasing, are paying dividends as we retain and gain share with these customers through the terms of our agreements.”
Income from operations increased 80.2% to $469.7 million from $260.6 million, due primarily to an increase in adjusted gross profits. These gains were partially offset by an increase in operating expenses, which rose 15% to $561.9 million. The adjusted operating margin of 45.5% increased 1,070 basis points.
“Our strong results were again driven by significant operating margin expansion in our North American Surface Transportation business, as we further improved the profitability of our truckload and less-than truckload businesses and grew our truckload volume in a declining market,” Biesterfeld said. “Our Global Forwarding team continued to deliver strong financial results, while benefiting from the market share they’ve gained over the past couple of years.”
The North American Surface Transportation segment reported that Q2 revenue rose 15.7% to $4.15 billion from $3.59 billion last year. Income from operations increased 83% to $276.5 million from $151.1 million.
NAST segment results were primarily driven by higher truckload and less-than-truckload pricing as well as an increase in truckload shipments. The average truckload linehaul rate per mile excluding fuel surcharges increased approximately 1.5% year-over-year while truckload linehaul cost per mile decreased approximately 5%. Operating expenses increased 21.9% primarily due to increased salaries, incentive compensation and technology expenses.
The Global Forwarding segment reported a Q2 revenue gain of 44.3% to $2.09 billion from $1.45 billion the prior year. Income from operations increased 54.8% to $167.6 million from $108.2 million the prior year.
The results for the segment were primarily driven by higher pricing and higher volume in ocean service, which reflected a strong demand environment and market share gains. Operating expenses increased 20.2%, primarily driven by increased salaries, incentive compensation, technology and travel expenses.
C.H. Robinson ranks No. 1 on the Transport Topics Top 100 list of the largest logistics companies in North America.
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