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Home / Business / XPO Logistics stock plunges as pull back by largest customer, weak Europe trump big buybacks

XPO Logistics stock plunges as pull back by largest customer, weak Europe trump big buybacks



XPO Logistics Inc. shares plummeted in active trading on Friday, as the loss of business by major customers and weaknesses in Europe led to a disappointing earnings ratio and overwhelmed the repurchase of relatively large shares .

"Well, there's no way to say it, we lost the quarter," said chief executive Bradley Jacobs in a post-earning conference call with analysts before the # 39; opening, according to a transcription provided by FactSet.

XPO, -12.63%

lost 1

5% in the afternoon trade, enough to make it the second biggest loser of the NYSE. The volume has risen to over 14.7 million shares, or nearly seven times the average of the whole day.

Last Thursday, the Connecticut-based company reported a fourth-quarter net profit that dropped to $ 84 million, or 62 cents per share, from $ 189 million, or $ 1.42 per share, a year ago . On an adjusted basis, earnings per share rose to 72 cents from 45 cents, but was lower than the FactSet consensus of 84 cents.

Revenues increased by 4.6% $ 4.39 billion, but were lower than the FactSet consensus of $ 4.57 billion. – unexpected transport revenues offset a slight slowdown in logistics. The company has updated its 2019 revenue growth target from 3% to 5%, while FactSet's current consensus on revenues of $ 18.48 billion implies a 7% growth

" We have miscalculated the weakness in France and the United Kingdom, "said Jacobs. "And in December, our biggest customer withdrew its postal injection business that is part of the last mile."

Although the company has not commented on who the customer might be, JPMorgan analyst Brian Ossenbeck said withdrawal is likely to be Amazon.com Inc.

AMZN, -0.91%

taking charge of its capacity.

"Reading between the lines, we believe that the loader is chopping injection, mediation, the last mile and logistics with XPO is Amazon," wrote Ossenbeck in a note to customers.

See also : Because your Amazon packages may soon arrive faster.

: FedEx and UPS stocks sink, after the analyst claims that Amazon could lead to an in-house business that could weigh.

XPO said the client's withdrawal will reduce the expectations of 2019 revenue of about $ 600 million, or "two" thirds of the customer's revenue that the company generated in 2018. This implies that the business of customer accounted for about 5.2% of the 2018 turnover of $ 17.28 billion.

Meanwhile, revenues from France accounted for 12.5% ​​of 2018 total revenue of $ 17.28 billion and the United Kingdom Represents 12.0%.

Another disappointment for XPO investors, the stock is now trading around 14% below which the company has spent $ 1 billion to buy back a large part of its common stock. [19659002] On December 14th, XPO announced a $ 1 billion share buyback program that arrived the day after the stock suffered its highest one day sell-off to close at a near 2 year low, after Short Short Spruce Capital Management said he believed that irregularities à finance cover the problems of company growth. At the time, the company stated that the short seller relationship was "intentionally misleading" and contained "significant inaccuracies".

Last Thursday, XPO said the program was completed on February 4, as the company repurchased 18 million shares, or about 14% of outstanding shares, at an average price of $ 56.09. From December 13 to February 4, the stock had grown 36%, with an average closing price of $ 58,45.

Separately, the company announced a new $ 1.5 billion repurchase program, which will allow it to repurchase up to about 27% of its outstanding shares.

XPO stocks plummeted by 35% in the last three months, while the Dow Jones Transportation Average

DJT, + 0.29%

slipped by 0.6% and the Dow Jones Industrial Average

DJIA, + 1.75%

turned to 1.3%.


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