XPO Logistics Raises Funds, Says Results to Lag Forecasts
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XPO Logistics, which recently completed $125 million in additional financing, said that its third-quarter results will not match analysts’ expectations.
XPO, Greenwich, Conn., disclosed details of the financing and the quarterly loss in recent regulatory filings.
XPO’s statement said the company expects an operating loss of $9.5 million to $10.5 million, with revenue in the range of $68 million to $72 million.
Earnings at XPO will lag expectations because of litigation, start-up and acquisition-related costs as well as weaker demand for expedited services, the company said.
XPO said the financing is being raised to help XPO make acquisitions, said a Sept. 21 report from John Larkin, an analyst for Stifel, Nicolaus & Co.
“Given the large [$190 million] cash balance at the end of the second quarter and the capital raise, we anticipate the company may be looking to make a large acquisition, or a series of medium-sized acquisitions, in the near future,” Larkin said in his report.
Bradley Jacobs, CEO of XPO, said in August that the company intends to have an annual revenue pace of more than $500 million by the end of 2012 (8-13, p. 6).
Jacobs said when he purchased a majority interest the former Express 1 Expedited Solutions last year that he intended to build a multibillion-dollar brokerage business.
Jacobs, who built United Rentals from scratch into a multibillion-dollar company, has said he intends to do the same with XPO.
He renamed the company XPO in September 2011.
The notes that are due in 2017 will pay 4.5% interest, twice annually, beginning in April. Underwriters have been offered the option to buy an additional $18.75 million in notes.
XPO’s statement said the notes also can be converted into stock or cash under some circumstances.
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