C.H. Robinson Q3 Adjusted Operating Income Rises 26%

C.H. Robinson Worldwide Inc. (NASDAQ: CHRW) reported higher third-quarter revenue and earnings as improved yields in North American truckload and global forwarding helped offset pressure on adjusted gross profit margins. Adjusted operating income rose 26.1% year over year, while the company said both major transportation segments reached their mid-cycle operating margin targets.

For the quarter ended September 30, 2026, total revenue increased 29.5% to $5.36 billion. Income from operations rose 23.1% to $271.8 million, and net income increased to $198.5 million, or $1.67 per diluted share, from $1.34 a year earlier.

Adjusted gross profit, a non-GAAP measure, grew 14.5% to $808.4 million, although the adjusted gross profit margin narrowed to 15.1% from 17.1%. Adjusted income from operations increased to $290.8 million from $230.6 million, while adjusted diluted earnings rose 28.6% to $1.80 per share. The adjustments included restructuring expenses, acquisition-related costs and an impairment charge associated with the company’s Kansas City regional center lease.

North American transportation gains volume and yield

North American Surface Transportation, or NAST, generated adjusted gross profit of $517.9 million, up 16.6%. Truckload adjusted gross profit increased 20.7% to $322.8 million, while less-than-truckload adjusted gross profit rose 8.0% to $169.5 million.

Combined truckload and LTL volume grew 3.5%, compared with a 0.3% decline in the Cass Freight Shipment Index. C.H. Robinson said NAST volume has outpaced the market index for 14 consecutive quarters.

Truckload adjusted gross profit per shipment increased 17.0% despite a 33.5% rise in linehaul cost per mile. Price per mile increased 31.5%, excluding fuel surcharges and costs. The company attributed the improved per-shipment result to disciplined revenue management, contractual repricing and the capture of higher-margin spot volume. Its truckload mix remained 70% contractual and 30% transactional, unchanged from the prior-year quarter.

NAST income from operations rose 17.9% to $203.9 million. Its adjusted operating margin excluding specified items reached 40.3%, compared with 39.2% a year earlier. Average segment headcount declined 11.4% as the company continued to automate processes and apply its Lean operating model.

Ocean and air lift Global Forwarding

Global Forwarding revenue climbed 46.1% to $1.15 billion, while adjusted gross profit increased 15.4% to $221.2 million. The segment benefited from higher ocean and air freight rates associated with global disruptions and supply constraints, though its adjusted gross profit margin declined to 19.3% from 24.4%.

Ocean adjusted gross profit rose 23.2% to $135.9 million, reflecting a 20.5% increase per shipment and a 2.0% rise in shipments. Air adjusted gross profit also grew 23.2%, to $43.1 million, as adjusted gross profit per metric ton increased 28.5%, partly offset by a 4.0% decline in tonnage. Customs adjusted gross profit fell 12.9% after adjusted gross profit per transaction decreased 13.0%.

Global Forwarding income from operations increased 63.3% to $80.0 million. Adjusted operating margin excluding specified items reached 36.6%, up from 30.0%, while average headcount fell 15.8%.

Elsewhere, Robinson Fresh adjusted gross profit declined 5.1% as higher fuel costs compressed margins, partly offset by increased foodservice-customer volume. Managed Solutions adjusted gross profit rose 4.1%, with $2.1 billion of freight under management during the quarter.

Productivity strategy and 2026 target

Management said its custom-built AI agents and Lean operating practices are reducing manual work across quoting, order entry, shipment tracking, appointment scheduling and carrier-related processes. The company reported year-over-year productivity improvements of more than 15% in both NAST and Global Forwarding during the quarter and more than 65% since the end of 2022.

C.H. Robinson said it remains confident in delivering 2026 adjusted operating income within its target range of $400 million to $500 million above the 2023 level, excluding restructuring and other charges. The company said the bottom of that range would be equivalent to at least $6 of adjusted diluted earnings per share. Its assumptions include outperforming the market, optimizing adjusted gross profit yields and generating further productivity gains, despite year-to-date market volume remaining below the prior-year level.

The company returned $289 million to shareholders during the quarter, including repurchases of 1.33 million shares at an average price of $160.64. Cash from operations decreased year over year, primarily because higher freight rates produced an unfavorable change in net operating working capital. Share repurchases have been paused following the agreement to acquire RXO Inc.

RXO acquisition planned for first half of 2027

C.H. Robinson expects its proposed acquisition of RXO to close in the first half of 2027, subject to regulatory approvals, approval by RXO stockholders and other closing conditions. The transaction values RXO at an implied enterprise value of $5.8 billion and provides consideration of $30.25 per RXO share.

Management estimates approximately $300 million of net run-rate cost synergies, mainly from cost-to-serve efficiencies, shared services savings and the elimination of overlapping third-party services. The company expects the deal to become accretive to adjusted earnings per share within nine months of closing and to produce mid-teens accretion in 2028. It is targeting net leverage of 1.75 to 2.25 times by the end of 2028.

The transaction remains exposed to closing and integration risks, including potential regulatory or stockholder approval delays, financing uncertainty, unexpected integration costs and the possibility that projected benefits may be delayed or not fully realized. C.H. Robinson also identified uncertain demand, freight pricing pressure, capacity availability, fuel costs, carrier and customer relationships, cybersecurity, interest rates and regulatory changes among the broader risks to its outlook.