Why C.H. Robinson Stock Is in the Fast Lane Today

Transportation logistics specialist C.H. Robinson Worldwide (NASDAQ: CHRW) used tight cost control to deliver an earnings beat. Investors are celebrating the success, sending shares of Robinson up 15% as of 10:30 a.m. ET.

Executing through the cycle

It is a difficult operating environment for transportation companies . Economic concerns have caused big shipping customers to cut back, softening demand for transport services.

C.H. Robinson appears to be handling the challenging environment quite well. The company earned $1.15 per share in the second quarter on sales of $4.5 billion, easily topping the $0.96-per-share earnings estimate despite revenue falling about $30 million short of consensus.

Revenue was up only 1.4% year over year, but the company decreased operating expenses by 4.4%. That helped fuel a 3% gain in gross profit and a 600-basis-point increase in adjusted operating margin.

"Although we continue to fight through an elongated freight recession, we are winning and executing better at this point in the cycle," CEO Dave Bozeman said in a statement. "Our truckload business grew market share for the fourth consecutive quarter, and we took share the right way, with margin improvement in mind."

Is C.H. Robinson a buy?

The quarterly revenue figure was aided by higher pricing in Robinson's ocean services division, which helped offset continued weakness in domestic trucking. Geopolitical concerns and disruptions to Red Sea shipping lanes are fueling higher prices overseas, a trend that should continue for the time being.

C.H. Robinson has a long-standing reputation as a top operator in its industry, and the company in its second quarter provided a template for how to manage through a difficult macro environment. There is nothing in these results to suggest that C.H. Robinson can't continue to outperform from here.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool recommends C.h. Robinson Worldwide. The Motley Fool has a disclosure policy .