XPO Reports Mixed Q4, 2019 Results

Company Names David Wyshner as CFO
XPO Logistics truck
XPO Logistics

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XPO Logistics Inc. posted mixed financial results for the fourth quarter and all of 2019.

The Greenwich, Conn.-based trucking and logistics company also named David Wyshner its chief financial officer.

XPO said fourth-quarter net income rose 17.6% to $107, or 93 cents per share, from the $91 million, or 62 cents, it earned in the same period a year earlier.

Revenue, however, dipped 5.7% to $4.14 billion from $4.39 billion in the same period in 2018.

For all of 2019, net income slid 0.9% to $440 million from $444 million in the prior year. But diluted earnings per share rose to $3.57 from $2.88. Revenue fell 3.7% to $16.6 billion from $17.3 billion.



“We delivered a good fourth quarter and a good year,” Bradley Jacobs, chairman and CEO of XPO Logistics, said in a news release Feb. 10. “I’m particularly pleased that we grew fourth quarter EPS by 50% year-over-year, and adjusted EPS by 56%.”

XPO reports its financial results divided into two segments: transportation and logistics.

About 64% of its 2019 revenue came from transportation, basically its trucking business, the company said in a presentation for investors accompanying its latest results. The remainder is derived from logistics.

XPO’s transportation segment generated revenue of $2.6 billion in the fourth quarter, an 8.1% decline from the $2.83 billion posted in the same period in 2018.

“The reduction in segment revenue primarily reflects a decrease in freight brokerage and direct postal injection revenue from the company’s largest customer, lower rates in truck brokerage and unfavorable foreign currency exchange, partially offset by revenue growth in last-mile and higher volumes in truck brokerage,” the company said.

But the business was profitable on an operating basis. Operating income for the transportation segment rose 63.2% in the fourth quarter to $173 million compared with $106 million a year earlier.

Its North American less-than-truckload unit performed well, the company said.

The logistics segment posted gains in both operating income and profit in the fourth quarter. Operating income rose 73.8% to $73 million for the fourth quarter 2019, compared with $42 million for the same period in 2018.

XPO attributed the gain to “strong cost discipline, including gains in workforce productivity, increasing traction of the company’s technology initiatives, and pricing optimization.”

But fourth-quarter revenue for the logistics segment was flat at $1.56 billion. The company said its biggest customer reduced business. But that was offset by revenue growth in consumer packaged goods, aerospace, and food and beverage companies in North America, and in e-commerce and chemicals in Europe.



Last month, XPO said it was reviewing strategic alternatives, including the possible sale or spinoff of one or more business units. But it said on Feb. 10 that it has not determined which, if any, business units will be sold or spun off.

XPO said its North American less-than-truckload unit won’t be for sale. Its business units include XPO North American Transportation, XPO European Transportation, XPO Less-Than-Truckload, XPO North American Supply Chain and XPO European Supply Chain.

The company issued full-year financial targets, but cautioned those could change based on the sale of any units.

XPO expects revenue growth of 3% to 5% year-over-year. The company estimated it will generate free cash flow in the range of $600 million to $700 million. It will spend $475 million to $525 million on capital expenditures.

Wyshner, prior to joining XPO, served as CFO of Wyndham Hotels & Resorts Inc. He replaces Sarah Glickman, who assumed the role of acting chief financial officer in August. Glickman will become senior vice president of corporate finance and transformation.

XPO ranks No. 1 on the Transport Topics Top 50 list of the largest logistics companies in North America and No. 3 on the TT Top 100 list of the largest for-hire carriers.

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