C.H. Robinson shares rise on strong Q1 profit
April 22 (Reuters) - Shares of C.H. Robinson Worldwide Inc (CHRW.O: Cotización) rose as much as 9 percent Wednesday, a day after the third-party logistics provider posted quarterly profit above market estimates, as higher gross margins at its transportation business helped offset weak revenue.
Credit Suisse raised its price target on shares of the company to $50 from $43, and said it expects gross margin expansion to continue into 2009, but at a slower pace than the first quarter. It kept its "neutral" rating on the company.
S&P Equity Research raised its price target on the stock by $6 to $62, while UBS raised its price target by $3 to $55.
The Eden Prairie, Minnesota-based company posted first-quarter net income of $85.4 million, or 50 cents a share, and reported a 15 percent drop in total revenue. [ID:nBNG425903]
The company's sourcing business revenue rose 8 percent, while revenue fell at its transportation business by 20 percent and information services by 16 percent.
"We believe C.H. Robinson will need to operate on all cylinders to maintain flat year-over-year earnings per share for the next two quarters, given increased pricing pressure and ongoing weak volumes," Wachovia Capital Markets said in a note to clients.
The brokerage, which has an "underperform" rating on the stock, expects gross profits to remain under pressure in the near-term.
Shares of the company were trading up 9 percent at $53.49 Wednesday morning on Nasdaq. (Reporting by Mary Meyase in Bangalore; Editing by Anne Pallivathuckal)
© Thomson Reuters 2016 All rights reserved.