C.H. Robinson Worldwide, a leading freight broker, experienced a significant decline in its stock following the release of its quarterly earnings report. The company’s stock fell by 12% to $72.40 on Thursday, marking its largest decrease since October 30, 2019, when it dropped by 15%. This performance made it the worst performer in the S&P 500 for the day, according to Dow Jones Market Data.
In the fourth quarter, C.H. Robinson posted adjusted earnings of 50 cents per share, falling short of Wall Street’s expectation of 81 cents. This figure represents a 53% decrease in adjusted per-share earnings compared to the previous year. Additionally, total revenue saw a decline of 17% to $4.2 billion, primarily due to lower pricing in the company’s truckload and ocean services. Analysts had predicted revenue of $4.3 billion.
CEO Dave Bozeman expressed disappointment with the results, stating, “Our fourth-quarter results did not meet our expectations as we continue to battle through a poor demand and pricing environment. Weak freight demand in an elongated market trough, combined with excess carrier capacity, continued to result in a very competitive market.”
The earnings report also generated disappointment among analysts at Evercore IS. In a note titled “The Bottom Sinks to New Depths,” the analysts noted that while C.H. Robinson is taking aggressive cost-saving measures to mitigate the effects of the prolonged downturn, it still requires relief from volume and pricing pressure in order to stabilize its earnings per share.
Evercore analysts maintained their In-Line rating on the stock but reduced their price target from $91 to $81 and lowered their earnings estimates.
It is clear that C.H. Robinson Worldwide is facing significant challenges in a demanding and highly competitive market. The company’s efforts to address these challenges will be crucial in determining its future success.
