C.H Robinson and Landstar stock prices slammed; insurance costs a factor
Strong financial numbers released between Tuesday and Wednesday by C.H. Robinson and Landstar were overshadowed on Wall Street by concern over one particular issue: insurance. Landstar kicked off the issue Tuesday afternoon with its third quarter earnings release that showed heavier than usual insurance charges. The C.H. Robinson (NASDAQ: CHRW) 3Q earnings, while not […] The post C.H Robinson and…
On Tuesday, both C.H. Robinson and Landstar released their third-quarter earnings reports, but the focus shifted to their insurance costs. Landstar's report revealed heavier-than-usual insurance charges, while C.H. Robinson had abnormally high insurance costs during the quarter. The increase in insurance costs was attributed to expanded broker liability exposure, the Montgomery vs. Caribe Transport II verdict, and a significant nuclear verdict in Lipe vs. Lupus Superior.
Analysts believe that these concerns led to a significant drop in stock prices for both companies. C.H. Robinson's stock fell by 11.14% to $127.60, while Landstar's stock dipped by 17.76% to $138.80. Despite the negative impact of insurance costs, C.H. Robinson's CFO, Damon Lee, expressed confidence that the company's insurance costs will remain manageable and not derail the company's earnings trajectory.
Lee also noted that their insurance expenses are currently below the benchmark of 50 basis points of total gross revenue.
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