The mighty are showing they are not immune to the poor market conditions with C.H. Robinson reporting massive losses for Q4.
Robinson reported total revenues decreased 8.3 percent to $3.8 billion, driven by lower pricing across all of its service offerings including 29.6 percent in truckload revenues, 3.4 percent in LTL and 3.1 percent in intermodal. Total income from operations decreased 43.3 percent to $130.5 million with it’s operating margin down to 33.4 percent across all modes in its NAST segment.
It’s Global Forwarding income from operations decreased 49.5 percent to 15 million with an operations margin at 11.7 percent.
“Despite a quarter of challenging operating results, I do believe we took important steps in the quarter. Pricing adjustments to reflect the current market enabled us to deliver flat volume in NAST truckload, including a mid-single-digit increase in contractual volume, and 4.5 percent volume growth in LTL, healthy market share gains in a quarter where volumes as measured by the Cass Freight Index declined approximately 6 percent. We are starting to see our increased investments in technology drive operating efficiency in our business, including a 330-basis point favorable spread between truckload volume growth and headcount growth in our NAST business,” said Bob Biesterfeld, Chief Executive Officer of C.H. Robinson.
Biesterfeld continued, “While our fourth quarter financial results demonstrate that we are not immune to large cyclical swings in the freight environment, we firmly believe that our continued investments through cycles will drive the alignment between net revenue growth and operating costs needed to drive operating margin expansion through freight cycles over the long term.”
Fourth Quarter Results Summary
- Total revenues decreased 8.3 percent to $3.8 billion, driven by lower pricing across most transportation service lines.
- Net revenues decreased 18.9 percent to $578.9 million, primarily driven by lower margin in truckload services.
- Operating expenses decreased 3.5 percent to $442.1 million. Personnel expenses decreased 11.9 percent to $299.0 million, driven primarily by declines in performance-based compensation, partially offset by a 1.9 percent increase in average headcount. Selling, general and administrative (“SG&A”) expenses increased 20.3 percent to $143.1 million. The largest contributors to the SG&A expense increase were increased technology spend and purchased services related to accelerating our growth and cost savings initiatives.
- Income from operations totaled $136.8 million, down 46.5 percent from last year due to declining net revenues and increased SG&A expenses. Operating margin of 23.6 percent declined 1,220 basis points.
- Interest and other expenses totaled $10.8 million, which primarily consists of interest expense. The fourth quarter also included a $0.9 million unfavorable impact from currency revaluation.
- The effective tax rate in the quarter was 21.4 percent compared to 23.9 percent last year. The lower effective tax rate was due primarily to one-time items resulting in a benefit of $3.2 million versus the prior year.
- Net income totaled $99.1 million, down 47.0 percent from a year ago. Diluted EPS of $0.73 decreased 45.5 percent.
Full-Year Results Summary
- Total revenues decreased 7.9 percent to $15.3 billion, driven by declines across most transportation service lines.
- Net revenues decreased 4.4 percent to $2.6 billion, primarily driven by lower margin in truckload services.
- Operating expenses increased 0.2 percent to $1.8 billion. Personnel expenses decreased 3.4 percent to $1.3 billion, driven primarily by declines in performance-based compensation, partially offset by a 2.3 percent increase in average headcount. SG&A expenses increased 10.7 percent to $497.8 million, due primarily to increases in purchased services, particularly commercial off-the-shelf software and occupancy, partially offset by a reduction in bad debt expense.
- Income from operations totaled $790.0 million, down 13.4 percent from last year due to declining net revenues and increased SG&A expenses. Operating margin of 30.5 percent decreased 320 basis points.
- Interest and other expenses totaled $47.7 million, which primarily consists of interest expense. The twelve-month period also included a $4.2 million unfavorable impact from currency revaluation.
- The effective tax rate for the full year was 22.3 percent compared to 24.5 percent in the year-ago period.
- Net income totaled $577.0 million, down 13.2 percent from a year ago. Diluted EPS of $4.19 decreased 11.4 percent.