Core Viewpoint - The article compares DHL Group Sponsored ADR (DHLGY) and C.H. Robinson Worldwide (CHRW) to determine which stock is a better undervalued investment option for investors in the Transportation - Services sector [1] Group 1: Zacks Rank and Earnings Outlook - DHLGY has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while CHRW has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, suggesting that DHLGY is likely experiencing a more favorable earnings outlook [3][7] Group 2: Valuation Metrics - DHLGY has a forward P/E ratio of 12.68, significantly lower than CHRW's forward P/E of 20.27, indicating that DHLGY may be undervalued [5] - The PEG ratio for DHLGY is 1.36, compared to CHRW's PEG ratio of 1.55, suggesting that DHLGY offers better value relative to its expected earnings growth [5] - DHLGY's P/B ratio is 2, while CHRW's P/B ratio is 6.58, further indicating that DHLGY is more attractively priced based on its book value [6] - Based on these valuation metrics, DHLGY holds a Value grade of A, whereas CHRW has a Value grade of C, reinforcing the notion that DHLGY is the superior value option [6]

Investment Rating - The report does not explicitly state an investment rating for the transportation and logistics industry Core Insights - The report highlights a positive trend in U.S. imports, with a 6.1% week-over-week increase as of May 18, outperforming seasonal expectations by 980 basis points and showing a 2.8% year-over-year increase [2] - Spot rates for truckload transportation have surged, with dry van rates increasing by 6.1% week-over-week, outperforming historical averages [3] - There are concerns regarding potential freight demand impacts due to tariffs, with expectations of a flat outlook for dry van spot rates in 2026 [6] Summary by Sections Import & Congestion Monitor - Container bookings from China to the U.S. are at five-year lows, down 27% compared to 2023, indicating subdued future demand [2] - The report notes a recovery in container imports at the Port of LA/LB, which increased by 24% week-over-week [2] Truckload and Rail Data - Spot rates for dry van, reefers, and flatbed have all increased week-over-week, with dry van rates now 4% higher year-over-year [3] - The dry van load-to-truck ratio increased by 57% week-over-week, indicating a tightening market [6] - Rail management teams express skepticism about the feasibility of transcontinental mergers due to regulatory barriers [7] Airfreight & Surface Transportation - Airfreight rates have been monitored closely due to tariff implications, with significant declines observed in key freight lanes, particularly the China-U.S. lane, which fell by 6% week-over-week [10] - The overall airfreight market is experiencing broad-based weakness, with all major lanes underperforming seasonal expectations year-to-date [10] Rail Performance - The report card for railroads indicates varying performance levels, with some railroads rated as excellent while others are fair or poor [9] - Regulatory challenges are highlighted as a significant barrier to potential mergers in the rail industry, with environmental impact studies being particularly burdensome [7]

Group 1 - The article provides an update on C.H. Robinson Worldwide (NASDAQ: CHRW) following a previous recommendation to hold due to concerns about growth outlook [1] - The author emphasizes a fundamentals-based approach to value investing, focusing on companies with long-term durability and robust balance sheets rather than just low multiples [1] - There is a recognition that investing in successful companies carries risks, particularly regarding valuation, but some situations may justify less concern about price in the short term due to significant growth potential [1]

Summary of C. H. Robinson Worldwide (CHRW) Conference Call Company Overview - **Company**: C. H. Robinson Worldwide (CHRW) - **Industry**: Freight brokerage and global forwarding Key Themes and Insights 1. **Market Challenges**: The market is currently difficult due to early April tariffs that created significant disruptions in cargo freight between the US and China, leading to inventory management challenges for customers [4][5][6] 2. **Inventory Dynamics**: Following the reduction of tariffs, there is a surge in inventory entering the system, creating a second "air pocket" that complicates demand forecasting [6][7] 3. **Strategic Focus**: CHRW's strategy emphasizes helping customers navigate difficult market conditions, with a focus on outperforming the market despite challenges [7][8] 4. **Productivity and Automation**: The company has achieved a 30% productivity improvement over the past two years, leveraging automation and technology to enhance operational efficiency [22][24] 5. **Gross Margin Expansion**: CHRW aims to expand gross margins by $90 million in 2025 and 2026, driven by price and cost optimization strategies [65][66] 6. **Market Share Growth**: The company has consistently grown its share of the domestic 3PL market, currently holding approximately 12.4% [44][64] 7. **Dynamic Pricing**: CHRW employs dynamic pricing strategies, allowing for real-time adjustments based on market conditions, which enhances both gross margins and customer experience [28][46][52] Additional Important Points 1. **Consolidation in the Industry**: There is ongoing consolidation in the freight forwarding sector, with larger players seeking scale and smaller players likely to merge or exit the market [43][44] 2. **Customer Relationships**: Post-COVID, customers are increasingly viewing supply chain interactions as strategic partnerships rather than purely transactional, leading to a willingness to pay higher prices for stability and predictability [68] 3. **Headcount Management**: CHRW's headcount has declined for eleven consecutive quarters, reflecting a focus on productivity rather than headcount growth, with automation playing a key role [73][78] 4. **Global Forwarding Margins**: The profitability of the Global Forwarding business is closely tied to market rates, and while the company is not immune to market fluctuations, it has initiatives in place to enhance margins regardless of market conditions [81][82] Conclusion C. H. Robinson Worldwide is navigating a challenging market landscape with a focus on strategic customer solutions, productivity improvements through automation, and a commitment to expanding gross margins. The company is well-positioned to continue growing its market share while adapting to evolving customer needs and market dynamics.

Industry Overview - The Zacks Transportation-Services industry is currently facing challenges such as weak freight rates, high inflation, and ongoing supply-chain disruptions [1][3][4] - Tariff-related uncertainty is another significant challenge impacting the industry [1][5] - Companies like Expeditors International of Washington, C.H. Robinson Worldwide, and Matson are noted for their ability to navigate these challenges [1] Economic Impact - The health of companies in the Zacks Transportation-Services industry is directly linked to the overall economy, with improvements in manufactured and retail goods positively affecting industry participants [2] - The Cass Freight Shipments Index has declined by 5.3% year over year in March, indicating weak freight demand [3] Cost Management - Industry players are focusing on cost-cutting measures to improve productivity and efficiency in response to high inflation and weaker demand [4] - Significant inflation levels are affecting labor, freight, and fuel costs [4] Tariff and Trade Issues - The current U.S. administration's protectionist policies are leading to increased tariffs, particularly affecting major trading partners like Canada, Mexico, and China [5] - The ongoing trade tensions are expected to result in increased volatility and uncertainty for the industry [5] Industry Performance - The Zacks Transportation-Services industry ranks 195 out of 250 Zacks industries, placing it in the bottom 21% [6][7] - The industry's earnings estimate for 2025 has decreased by 21.6% since August 2024, indicating a negative earnings outlook [8] Stock Market Performance - The industry has underperformed the S&P 500, declining by 14.5% over the past year compared to the S&P 500's appreciation of 9.9% [11] - The industry is currently trading at a forward price-to-sales ratio of 1.46X, compared to the S&P 500's 4.92X [13] Company Highlights - **Expeditors International of Washington (EXPD)**: Currently holds a Zacks Rank 3 (Hold), has beaten earnings estimates in three of the last four quarters with an average beat of 11.6% [17] - **C.H. Robinson Worldwide (CHRW)**: Also holds a Zacks Rank 3, has surpassed earnings estimates in each of the past four quarters with an average beat of 14.5% [21] - **Matson (MATX)**: Carries a Zacks Rank 3, has a trailing four-quarter earnings surprise of 12.7% on average [24]

Financial Performance - Total revenues for Q1 2025 were $4,046,740, a decrease of 8.3% from $4,412,311 in Q1 2024[13] - Net income for Q1 2025 increased to $135,302, up 45.5% from $92,904 in Q1 2024[13] - Basic net income per share rose to $1.12 in Q1 2025, compared to $0.78 in Q1 2024, reflecting a 43.6% increase[13] - The company reported a comprehensive income of $145,737 for Q1 2025, significantly higher than $73,414 in Q1 2024[13] - Revenues from external customers in the NAST segment were $2,868,420 in Q1 2025, down from $3,000,313 in Q1 2024, representing a decline of 4.4%[71] - Segment operating income for Q1 2025 was $186,614, compared to $140,447 in Q1 2024, reflecting an increase of 32.8%[69] Assets and Liabilities - Total current assets decreased to $2,923,725 as of March 31, 2025, down from $2,969,603 at the end of 2024, a decline of 1.5%[11] - Total liabilities decreased to $3,491,389 as of March 31, 2025, down from $3,575,875 at the end of 2024, a reduction of 2.4%[11] - Cash and cash equivalents at the end of Q1 2025 were $129,942, down from $145,762 at the end of 2024, a decrease of 10.9%[11] - As of March 31, 2025, total debt amounted to $1,389.9 million, an increase from $1,377.6 million as of December 31, 2024[37] - Goodwill balance as of March 31, 2025, was $1,432.1 million, down from $1,457.6 million as of December 31, 2024, primarily due to the divestiture[27] - Identifiable intangible assets totaled $80.2 million as of March 31, 2025, down from $86.9 million as of December 31, 2024[29] Cash Flow and Dividends - Operating cash flow for Q1 2025 was $106,531, compared to a cash outflow of $33,323 in Q1 2024[18] - The company declared dividends of $0.62 per share in Q1 2025, totaling $74,418[15] - The company repurchased 485 shares of common stock for a total cost of $48,722 during Q1 2025[15] Restructuring and Impairments - The company initiated a restructuring program in 2024 aimed at reducing costs and optimizing management hierarchy, which included workforce reductions[83] - The company reported a significant impairment charge of $6.3 million related to its Kansas City regional center lease in Q1 2025[77] - Accrued restructuring reserves were $1.5 million as of March 31, 2025, down from $4.0 million as of December 31, 2024[85] - The company paid $2.5 million in cash during Q1 2025 related to the 2024 Restructuring Program, with total restructuring charges amounting to $12.9 million for the three months ended March 31, 2024[85] Divestitures - The Company completed the sale of its Europe Surface Transportation business on February 1, 2025, resulting in a $44.5 million loss recorded in the twelve months ended December 31, 2024[33] - A pre-tax loss of $44.5 million was recognized in 2024 from the divestiture of the Europe Surface Transportation business, which included a $32.8 million loss on the disposal group classified as held for sale[89] - The sale of the Europe Surface Transportation business closed on February 1, 2025, with $27.7 million received at closing and additional consideration due in installments[90] - An additional pre-tax loss of $2.4 million was recognized in Q1 2025 related to the Europe Surface Transportation divestiture[90] - The company reported personnel expenses of $1.2 million and other selling, general, and administrative expenses of $1.2 million related to the Europe Surface Transportation divestiture in Q1 2025[91] Credit Facilities and Interest Rates - The Company has a senior unsecured revolving credit facility with a total availability of $1 billion, maturing on November 19, 2027[38] - The average interest rate for the revolving credit facility as of March 31, 2025, was 5.55%, slightly down from 5.58% as of December 31, 2024[37] - The Company recorded $467.9 million in receivables securitization facility debt as of March 31, 2025, compared to $446.8 million as of December 31, 2024[37] - The Receivables Securitization Facility has a total availability of $500 million as of March 31, 2025, with an interest rate based on SOFR plus a credit spread adjustment of 0.90 percent[44] - The Receivables Securitization Facility was amended on November 7, 2023, extending the termination date to November 7, 2025, while maintaining the total available amount of $500 million[47] Tax and Compensation - The effective income tax rate for the three months ended March 31, 2025, was 13.7%, down from 15.8% in the same period of 2024[53] - Total stock-based compensation expense for the three months ended March 31, 2025, was $23.1 million, compared to $22.7 million in 2024[55] - As of March 31, 2025, there was unrecognized compensation expense of $220.3 million related to previously granted stock awards assuming maximum achievement on PSUs[62] - The company has $23.9 million of unrecognized tax benefits and expects this liability to decrease by approximately $1.1 million in the next 12 months due to the lapsing of statutes of limitations[54] Workforce and Employee Metrics - The average employee headcount increased to 13,347 in Q1 2025 from 14,990 in Q1 2024, indicating a reduction in workforce[70] - Operating lease expense for Q1 2025 was $27,885, up from $25,637 in Q1 2024, marking an increase of 8.8%[77] - The allowance for credit losses on accounts receivable decreased to $12,666 as of March 31, 2025, from $14,038 at the end of 2024, a reduction of 9.7%[79] - Other comprehensive income for Q1 2025 was $10.4 million, compared to a loss of $19.5 million in Q1 2024, indicating a significant improvement[81] Market Risk - There were no material changes in market risk as of March 31, 2025, compared to disclosures in the company's 2024 Annual Report[148]

Core Viewpoint - C.H. Robinson Worldwide, Inc. (CHRW) reported mixed first-quarter 2025 results, with earnings exceeding expectations while revenues fell short [1] Financial Performance - Quarterly earnings per share (EPS) of $1.17 surpassed the Zacks Consensus Estimate of $1.02, reflecting a 36% year-over-year improvement [2] - Total revenues amounted to $4.04 billion, missing the Zacks Consensus Estimate of $4.31 billion, and decreased by 8.2% year over year due to the divestiture of the Europe Surface Transportation business, lower volume in North America truckload services, and reduced pricing in ocean services [2] - Adjusted gross profits increased by 2.3% year over year to $673.1 million, attributed to higher adjusted gross profit per transaction in truckload and LTL services [3] - The adjusted operating margin improved to 26.3%, up 700 basis points from the previous year, while operating expenses decreased by 6.5% year over year to $496.2 million [3] Segmental Results - North American Surface Transportation generated total revenues of $2.86 billion, down 4.4% year over year, due to lower truckload volume and market demand for freight, with adjusted gross profits growing 5.3% year over year to $418.32 million [4] - Global Forwarding revenues fell by 9.8% year over year to $774.88 million, primarily due to lower pricing in ocean services, with adjusted gross profits increasing by 2.5% year over year to $184.62 million [5] - Revenues from other sources decreased by 27.1% year over year to $403.43 million [5] - The transportation unit delivered an adjusted gross profit of $640.54 million, up 2.1% from the prior year [6] Profitability by Service Line - Adjusted gross profits for Truckload, LTL, Ocean, Air, and Customs grew by 1.9%, 5.2%, 2.2%, 7.5%, and 3.2% year over year, respectively, while other logistics services saw an 8% decline in adjusted gross profits [7] Cash Flow and Capital Expenditures - CHRW generated $106.5 million in cash from operations in the first quarter, compared to $33.3 million used in the prior-year quarter, driven by a $42.4 million increase in net income and a $136.8 million decrease in cash used by changes in net operating working capital [9] - The company returned $175 million to shareholders, including $77.5 million in cash dividends and $97.5 million through share repurchases [9] - Capital expenditures totaled $16.1 million in the reported quarter, with expectations for 2025 now between $65 million and $75 million, down from a prior range of $75-$85 million [10][11] Balance Sheet - At the end of the first quarter, CHRW had cash and cash equivalents of $129.94 million, down from $145.76 million at the end of the previous quarter, while long-term debt slightly increased to $922.08 million [8]

Group 1 - C.H. Robinson Worldwide (NASDAQ: CHRW) has shown strong performance over the past year, with shares increasing by approximately 25% [1] - In contrast, other logistics companies, such as J.B. Hunt (JBHT), have faced significant struggles during the same period [1] - The article highlights the author's experience in making contrarian bets based on macro views and stock-specific turnaround stories to achieve outsized returns with a favorable risk/reward profile [1]

For the quarter ended March 2025, C.H. Robinson Worldwide (CHRW) reported revenue of $4.05 billion, down 8.3% over the same period last year. EPS came in at $1.17, compared to $0.86 in the year-ago quarter.The reported revenue represents a surprise of -6.21% over the Zacks Consensus Estimate of $4.31 billion. With the consensus EPS estimate being $1.02, the EPS surprise was +14.71%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wal ...

C.H. Robinson Worldwide (CHRW) came out with quarterly earnings of $1.17 per share, beating the Zacks Consensus Estimate of $1.02 per share. This compares to earnings of $0.86 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 14.71%. A quarter ago, it was expected that this trucking company would post earnings of $1.12 per share when it actually produced earnings of $1.21, delivering a surprise of 8.04%.Over the last four quarte ...