Logistics giant C.H. Robinson Worldwide is the latest Fortune 500 company to see signs of a slowing economy.
On Wednesday, Eden Prairie-based C.H. Robinson reported a 4% drop in its overall revenue, driven largely by lower pricing for air and ocean transportation.
Its quarterly profit fell to $225.8 million, or $1.78 a share, failing to meet Wall Street's estimate of $2.17. The company's stock closed down 9.9% for the day.
"Today, we believe that we are entering a time of slower economic growth where freight markets will continue to cool from their peaks," Bob Biesterfeld, CEO of C.H. Robinson, said in a statement.
The company had forecast in July that demand would slow in the second half of the year, Biesterfeld said, on lower demand in retail and housing materials.
"We're now seeing those expectations play out, with slowing freight demand and price declines in the freight forwarding and surface transportation markets," he said.
In response to a softening economy, the company is implementing structural cost reductions, including staff cuts, designed to total $150 million in annual net cost savings.
"Thequarter was disappointing for C.H. Robinson, as both sales and earnings were below forecast. … Inthe near term,we expect pressures on profitability with volatility in shipping volumes due to supply-chain disruptions and variability in global economic growth," Jeff Windau, an analyst with Edward Jones, said in a research note Wednesday.
