XPO Logistics reported lower profits and overall flat revenue in the first quarter of 2019, but the company’s CEO drew an optimistic picture of the business going forward with $1.1 billion in new business added so far this year and more than $4 billion in active bids in its sales pipeline.
The Greenwich, Conn.-based company is looking to recover from the loss of $600 million in business from its largest customer, which was widely reported to be Amazon.com, along with the bankruptcy of a major customer in the United Kingdom and a slowdown in business in France in 2018.
“In the first quarter, we delivered on expectations,” CEO Brad Jacobs said in a May 1 earnings release.
XPO said net income attributable to common shareholders was $47 million, or 40 cents a share, in the three months ended March 31, compared with $73 million, or 56 cents a share, in the same period a year ago.
Revenue was $4.12 billion in the first quarter of 2019 compared with $4.19 billion in 2018.
Adjusted earnings before interest, taxes, depreciation and amortization increased to $343 million in the first quarter of 2019 from $330 million in the same period a year ago, the company reported.
For the year, XPO expects overall revenue to grow between 3% and 5% and cash flow to be in the range of $525 million to $625 million.
Organic business growth is projected to be between 5.5% and 7.5% compared with previous estimates of between 4% and 6%, the company reported.
XPO ceased offering direct postal injection services as part of its last-mile business in the first quarter. This is the service previously offered by XPO to its largest customer and involved consolidating and delivering packages to postal distribution centers.
In March, the company terminated Ken Wagers, a former Amazon executive who had joined XPO in 2018, as part of an effort to refocus on growing the company’s freight hauling and contract logistics businesses and steering clear of mergers and acquisitions.
In the first quarter, XPO’s transportation segment, which includes freight brokerage and general freight transportation, last-mile delivery, air and ocean freight forwarding and managed transportation services, generated operating income of $128 million, compared with $139 million a year ago. Revenue fell to $2.66 billion from $2.77 billion.
Results for the company’s less-than-truckload freight business in North America were generally positive with operating income of $97 million in the first quarter of 2019 compared with $95 million a year ago and revenue of $913 million compared with $907 million.
“We accelerated our year-over-year yield improvements to 3% in the first quarter from 1.1% in the fourth quarter of 2018, while delivering high levels of service for customers,” Jacobs stated.
XPO ranks No. 3 on the Transport Topics Top 100 list of largest for-hire carriers in North America and No. 3 on the TT list of largest for-hire carriers in the LTL sector.
Logistics segment operating income was $46 million in the first quarter of 2019 compared with $48 million a year ago. Gross revenue increased 3.2% to $1.49 billion from $1.45 billion. Included in this business unit is warehousing and distribution, order fulfillment, returned goods management, packaging and assembly and supply chain consulting services.
“We generated significant growth in our e-commerce, food and beverage, consumer packaged goods and aerospace verticals,” Jacobs reported.
XPO ranks No. 1 on the Transport Topics Top 50 list of the largest logistics companies in North America.