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Thursday, February 27 Business

XPO Logistics’ quarterly revenues drop, profits rise

GREENWICH — XPO Logistics this week reported lower revenues and higher profits for the past quarter, while it confirmed that it was still exploring possible sales and spin-offs.

The transportation-and-logistics giant’s fourth-quarter revenues totaled about $4.14 billion, down 6 percent from the same period in 2018. Quarterly profits totaled $96 million, compared with $84 million for the same period in 2018.

For all of 2019, XPO’s revenues totaled nearly $17 billion, down 4 percent from 2018. Its annual profit of $379 million compared with a bottom line of $390 million in 2018.

Last year, XPO disclosed that it would lose approximately $600 million in returns from its largest customer, equal to about two-thirds of its business from that firm. The company has not named the client, but it has been widely reported to be Amazon.

“When we had our largest customer in-source $600 million in business, roughly about a year ago, we said 2019 is going to be a year where we rebuild, that we replace the business that we lost and resume growth from there,” XPO CEO and Chairman Bradley Jacobs said Tuesday on a call with investment analysts. “I’m happy we started the year with $600 million in the hole and still were able to produce fantastic numbers in a lousy market.”

After the release of the results, XPO shares closed Tuesday at about $92, down 2 percent from their Monday finish. At their 52-week high, they hit about $96.

“Anytime (earnings per share) is up 50 percent and adjusted EPS is up 56 percent, we’re going to say we had a good quarter,” Jacobs said. “We do feel that we’re well-positioned going into 2020.”

Last month, XPO announced that it was considering a sale or spin-off of one or more of its businesses, potential deals aimed at benefiting shareholders.

Company officials said they had not decided yet which, if any, units to sell or spin off, but they have ruled out a sale of the firm’s North American less-than-truckload shipping division.

XPO has not set a timetable for completing the review of its strategic options.

“The strategic alternatives process is going very, very well,” Jacobs said. “You can count on us — no matter what the situation is — to do what’s best for the shareholders.”

In its only sale so far, XPO transferred in October 2016 its truckload business to the Canada-based TransForce for $558 million.

On Monday, the company announced the appointment of a new chief financial officer, who will take over March 2. New CFO David Wyshner’s 28-year career includes 13 years as a CFO of multibillion-dollar public companies, including most recently as CFO of Wyndham Hotels & Resorts.

Among other milestones, XPO was named last month one of Fortune magazine’s World Most Admired Companies. The recognition marked the company’s third-straight year on the list, with the firm this year topping the trucking, transportation and logistics category.

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At the same time, XPO is pushing ahead with 10 initiatives, largely focused on technology. Those projects could cumulatively boost its bottom line by $700 million to $1 billion by 2022.

As the No. 180 company on last year’s Fortune 500 list, XPO operates across about 1,500 locations in 30 countries, with about 100,000 employees. It is headquartered at 5 American Lane, in the northwest corner of Greenwich.

pschott@stamfordadvocate.com; 203-964-2236; twitter: @paulschott

Paul Schott|Staff reporter

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