Tags: C.H. | Robinson | goals | CHRW

C.H. Robinson Meeting Profit Goals

By Tim Plaehn   |   Friday, 02 Dec 2011 01:27 PM

Transportation and logistics company C.H. Robinson Worldwide (CHRW) has a published goal of 15 percent growth of revenue and profits over the long term. The results so far in 2011 meet expectations.

C.H. Robinson Worldwide sources and provides the services the company's customers need to ship their goods and products. The business involves worldwide shipping by truck, train, plane and ship. C.H. Robinson does not provide the transportation services. Instead, it contracts with different transport companies to give customers a one-stop shop.

The company generates 88 percent of revenues from transportation services, customs brokerage and transportation management fees. Eight percent of sales are from the procurement and distribution of fresh produce. The final 4 percent of revenue is generated through payments and reporting services.

Since C.H. Robinson acts as the middleman between customers and service providers, the company breaks out net revenues from total revenues to show the amount of billed sales the company keeps for its own business.

For the first nine months of 2011, the company reported net revenues of $1.23 billion — out of $7.8 billion total — and up 14 percent from $1.08 billion of net sales for the same period in 2010.

Net income for the three quarters was also up 14 percent to $1.95 per share, up from $1.71. The earnings estimate for full year 2011 is $2.65 per share, compared to $2.33 earned in 2010.

Fragmented industry


The transportation industry in the United States is a $1 trillion business per year. C.H. Robinson management estimates approximately 15 percent of contracted transportation services go through brokers or third party logistics companies. The company believes its advanced information management, warehousing and distribution services and ability to provide global shipping solutions will allow it to increase its share of the available revenues.

C.H. Robinson has been increasing the quarterly dividend at a steady pace. The current 29 cents per share quarterly dividend is up from 7.5 cents in 2005.

The most recent analyst rating changes were a downgrade to underweight from neutral by the analysts at JP Morgan and to underweight from hold by BB&T Capital Markets.

The company reports next on Feb. 1.

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Transportation and logistics company C.H. Robinson Worldwide (CHRW) has a published goal of 15 percent growth of revenue and profits over the long term. The results so far in 2011 meet expectations. C.H. Robinson Worldwide sources and provides the services the company's...
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