EDEN PRAIRIE, Minn. — C.H. Robinson Worldwide is reporting significant year-over-year increase in profitability for Q4.
According to a company press release, the increase was driven by disciplined execution, a focus on quality of volume and improvement in gross profit margin, productivity and operating leverage.
“We’ve talked extensively over the past year about our new Robinson operating model and the disciplined execution that the model is enabling, as well as how we’re leveraging our industry leading talent and technology to raise the bar in logistics,” said Dave Bozeman, president and CEO. “The benefits of these efforts were never more evident than in the significant year-over-year improvement in our fourth quarter financial results.”
Fourth Quarter Highlights
- Gross profits increased 10.4% to $672.9 million.
- Income from operations increased 71.1% to $183.8 million.
- Adjusted operating margin increased 940 basis points to 26.8% .
- Adjusted operating margin, excluding restructuring and loss on divestiture, increased 1,020 basis points to 26.9%.
- Diluted earnings per share (EPS) increased 369.2% to $1.22.
- Adjusted EPS increased 142.0% to $1.21.
- Cash generated by operations increased by $220.6 million to $267.9 million.
“In what continues to be a historically prolonged freight recession, with market growth in 2024 that did not materialize as had been projected, the difference in our execution versus last year is stark,” Bozeman said. “Our people are embracing the discipline needed to generate higher highs and higher lows across market cycles, resulting in a higher quality of volume, greater productivity, and an expansion of our gross profit and operating profit margins.”
Full-Year Key Metrics
- Gross profits increased 5.8% to $2.7 billion.
- Income from operations increased 30.0% to $669.1 million.
- Adjusted operating margin(1) increased 440 basis points to 24.2% .
- Adjusted operating margin, excluding restructuring and loss on divestiture, increased 630 basis points to 27.5%.
- Diluted EPS increased 41.9% to $3.86.
- Adjusted EPS(1)increased 36.7% to $4.51.
- Cash generated by operations decreased by $222.9 million to $509.1 million, due to an increase in net operating working capital related to higher ocean rates.
Greater Value for Customers
“In a trucking environment where the cost of purchased transportation increased in the fourth quarter due to a decline in industry capacity, our dynamic costing and pricing tools, our revenue management practices and our cost of hire advantage enabled us to provide greater value to our customers, and at the same time, improve our NAST gross profit margin both year-over-year and sequentially,” Bozeman said.
Summary of Fourth Quarter of 2024 Results Compared to the Fourth Quarter of 2023
- Total revenues decreased 0.9% to $4.2 billion, primarily driven by lower volume and pricing in truckload services, partially offset by higher pricing in our ocean services.
- Gross profits increased 10.4% to $672.9 million. Adjusted gross profits increased 10.7% to $684.6 million, primarily driven by higher adjusted gross profit per transaction in our truckload and ocean services.
- Operating expenses decreased 2.0% to $500.8 million. Personnel expenses decreased 2.1% to $354.4 million, primarily due to cost optimization efforts and productivity improvements, partially offset by higher variable compensation. Average employee headcount declined 9.5%. Other selling, general and administrative (“SG&A”) expensesdecreased 2.0% to $146.4 million, primarily due to a $12.6 million favorable adjustment to the loss on the planned divestiture of our Europe Surface Transportation business, which was partially offset by impairments related to reducing our facilities footprint.
- Income from operations totaled $183.8 million, up 71.1% due to both the increase in adjusted gross profit and decrease in operating expenses.Adjusted operating margin of 26.8% increased 940 basis points.
- Interest and other income/expense, net totaled $15.4 million of expense, consisting primarily of $18.8 million of interest expense, which decreased $2.8 million versus last year due to a lower average debt balance and lower variable interest rates, and a $3.3 million net gain from foreign currency revaluation and realized foreign currency gains and losses.
- The effective tax rate in the quarter was 11.4%, compared to 55.3% in the fourth quarter of 2023. The lower rate in the fourth quarter of 2024 was driven by the impact of non-recurring discrete items, higher U.S. tax credits, and increased tax benefit related to stock-based compensation, partially offset by lower foreign tax credits.
- Net income totaled $149.3 million, up 382.1% from a year ago. Diluted EPS of $1.22 increased 369.2%. Adjusted EPS of $1.21 increased 142.0%.
Team Effort
“As I reflect on the noteworthy progress that we made in 2024, I’d like to thank the Robinson team for all the work they’ve put in to get to this point,” Bozeman said. “I don’t take their efforts and dedication for granted, and I commend them for helping us get more fit, fast and focused and for embracing the discipline that the new operating model demands. On my first earnings call in August of 2023, I said that I looked forward to leading this great company to new heights and sharing our progress with all of you along our journey. While there’s still more grass to cut, I believe we’re on the right path, and I’m pleased with the progress we’ve made on evolving our strategy and improving our execution by instilling discipline with our new operating model.”
Dana Guthrie is an award-winning journalist who has been featured in multiple newspapers, books and magazines across the globe. She is currently based in the Atlanta, Georgia, area.
