C.H. Robinson Worldwide Inc., the Eden Prairie based third-party logistics firm, said shipping demand accelerated throughout the third quarter while outstripping the growth in carrier capacity.
"We were able to deliver solid performance across our diversified business portfolio and improve our results as the quarter progressed," said C.H. Robinson's chief executive, Bob Biesterfeld, in a news release.
The company earned $136.5 million, or $1 per share, a 7% increase over the third quarter of 2019 and 3 cents per share better than analyst expectations.
Higher shipping volume and pricing drove a revenue increase of 9.6% to $4.2 billion for the quarter. Analysts had expected total revenue of $3.9 billion. But rising costs and lower profit margins meant the company's net revenue decreased 7% to $589.3 million.
The company worked to meet the contractual shipping commitments but increased shipping demand meant more loads moved to the spot market driving up spot market prices which increased C.H. Robinson's cost of purchased transportation.
"Despite a dislocated market with a constrained capacity base, we were able to deliver solid performance across our diversified business portfolio and improve our results as the quarter progressed due to the efforts of our C.H. Robinson team members around the world," Biesterfeld told analysts.
During the quarter, C.H. Robinson continued to invest in its long-term technology and business goals while also managing costs.
It continued to invest in its signature Navisphere platform and added a program that helps large shippers more effectively book shipments based on the uniqueness of the their network rather than rely on bidding out bulk shipping purchases on an annual basis.
The company decreased is personnel expenses during the quarter by 5.5%. The company said average full-time equivalent employees decreased 7.6 % due to furloughs and reduced work hours. Those actions were started in the second quarter and ended in the third.
Shares of C.H. Robinson closed Wednesday at $88.58 per share, down 11.5% on a down market today. For the past 52-weeks company shares have traded between $56.94 and $106.75 per share.