Freight logistics firm C.H. Robinson saw net income rise nearly 17 percent in the first quarter as demand for its services increased at the same time it saw the effects of lowered federal tax rate.
First-quarter revenue rose 15 percent to $3.9 billion over the same period a year ago, the company said after markets closed on Tuesday. For the quarter ended March 31, net income was $142 million, or $1.01 per share, which beat analysts' average estimates of 99 cents a share.
Revenue rose across all four divisions, officials said, noting that sales were helped by growth in demand for full and partial truckloads and air, ocean and customs services.
The company's largest business — North American surface transportation business — alone saw revenue jump 18 percent to nearly $2.7 billion and profits rise 12 percent to $174 million during the quarter thanks to higher pricing.
Yet overall growth income was offset some by costs associated with a fresh wave of hiring.
Smaller divisions such as C.H.'s air and ocean Global Forwarding unit and its Robinson Fresh unit saw profits fall amid the rising staffing costs, airfreight and technology investments and the write-off of one supplier's advance.
"In a rapidly changing freight environment, we were able to deliver double-digit net revenue growth, expand our digital capabilities, make significant investments in our Global Forwarding business and deliver increased operating income," CEO John Wiehoff said in a statement.
Analyst Jim Corridore of CFRA Research in New York told investors Tuesday that he positively revised his earnings guidance for 2019. But he also cut his 12-month stock forecast for C.H. Robinson in 2018 because of "our concerns about rising purchased transportation costs and other expenses, which is impacting profits."
While profit grew 17 percent, Corridore said Robinson's tax rate dropping to 21.3 percent from 31.7 percent had a lot to do with that. He also mentioned the higher costs in the Global Forwarding and Robinson Fresh segments.
The company's stock fell more than 8.5 percent to close Wednesday at $82.90.