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C.H. Robinson (NASDAQ:CHRW) -12.9% in Thursday’s trading to its lowest since May 2020 after the freight broker reported Q4 adjusted earnings that missed estimates by a wide margin, as it continues to struggle with poor freight demand and a negative pricing environment.
Q4 net profit fell by more than two thirds to $31M, or $0.26/share, from $96.2M, or $0.80/share, in the year-earlier quarter, while revenues slid 17% Y/Y to $4.22B, including an 18% drop in transportation revenue to $3.93B.
“Weak freight demand in an elongated market trough, combined with excess carrier capacity, continued to result in a very competitive market,” CEO Dave Bozeman said, adding that 2024 likely will present some of the same headwinds as last year.
“Even with upside to cost-saving goals and a 13%-plus reduction in average headcount, the company needs volume and pricing pressure to ease and reverse before EPS stops falling,” Evercore ISI analysts wrote in maintaining their In-Line rating and cutting their price target to $81 from $91 and lowering earnings estimates.
C.H. Robinson’s (CHRW) Q4 miss was attributed to pressures from the ongoing freight recession and personnel expenses that came in at the high end of guidance, Jefferies analyst Stephanie Moore said in keeping her Hold rating, and she “continues to see that the worst of the freight recession impact on Y/Y results is behind us, and we still expect profit growth by the back half of the year.”