What happened

XPO Logistics (XPO -3.83%) is having a hard time winning back investor confidence. Shares of the logistics company slumped 17.2% in February, according to data provided by S&P Global Market Intelligence, giving up all its gains from January and then some. In fact, the stock continues to head lower this month, having dropped another 4% as of this writing.

XPO's fourth-quarter and fiscal 2018 earnings report, released on Feb. 14, is entirely to blame for the stock's drop last month, but its operational numbers didn't really trigger the fall -- something else did.

So what

Though XPO reported 4% growth in revenue in Q4, it fell considerably short of analysts' estimates. So did its net income of only $84 million, which was a sharp 56% drop year over year. The reason behind the shocking decline spooked the market: XPO's largest customer doesn't intend to do as much business with XPO anymore. Speculation is rife that the customer is none other than Amazon (AMZN -2.64%), the e-commerce behemoth that's long been giving freight and logistics companies sleepless nights.

Check out the latest earnings call transcript for XPO Logistics.

A shocked man with a falling graph of a stock behind him.

Image source: Getty Images.

Now, XPO didn't specify the customer's name in the earnings press release, of course. All CEO Bradley Jacobs said is "headwinds in France and the UK and a loss of profit in the postal injection business with our largest customer" were to blame for a poor fourth quarter.

What's worse is that this development came at a time when XPO shares were already under tremendous pressure thanks to anticipated deceleration in growth and short seller Spruce Point Capital's recent accusations of "financial irregularities."

With revenue from a key customer in jeopardy, XPO also substantially downgraded its earnings before interest, taxes, depreciation, and amortization (EBITDA) growth forecast for 2019 -- to between 6% and 10% from its previous guidance of 12% to 15%. At the same time, management seems to have changed its stance on growth and doesn't expect any major acquisition in the near future. Instead it's deploying the money to repurchase shares.

Now what

For shareholders, a company's losing its largest customer is undeniably concerning news. On the flip side, management's decision to buy back shares reinforces its confidence in the company's value, but the departure in XPO's acquisitive business strategy raises growth concerns as well.

With things going haywire at a company that was growing at a rapid pace, it's no surprise that XPO stock has lost favor with the market.