XPO Logistics (NYSE:XPO) said Thursday it expects 2020 to be "a lost year of earnings growth" due to the COVID-19 pandemic, but management is optimistic conditions will rebound heading into 2021.
In his annual letter to shareholders, CEO Brad Jacobs called himself "a pragmatic bear in the short-term," but said he remains "a mega-bull in the long-term" when it comes to his company.
"Things are difficult right now and they'll get worse in the short-term," Jacobs wrote. "Then they'll get much, much better. That's what I see for XPO, our industry and the world."
It's been a chaotic few years for XPO shareholders. It began in late 2018, when the company was dealt a double blow of criticism from a short-seller and the unexpected loss of a major customer. XPO shares had gained 3,000% during a 10-year period that ended in mid-2018 but gave up about half of those gains in late 2018 and early 2019.
Shares of XPO are off 30% year to date, and down more than 50% from its September 2018 highs.
The company spent the rest of 2019 rebuilding credibility with shareholders. In January, XPO got a boost when it said it was exploring the sale of significant chunks of its business. Jacobs called off that divestiture plan in late March due to market conditions, but remains optimistic about the economy and XPO's long-term growth prospects.
"Consumer confidence is very weak right now, but once testing, therapeutic drugs and a vaccine are widely available, confidence will rebound and the global mechanisms for GDP growth will resume," Jacobs wrote. "We think that will be in 2021, and when it happens, we have a number of things going for us."
Jacobs said that transportation and logistics remains an important part of the global economy, and cited XPO's relationships with about 70% of the Fortune 500 and its investments in technology to make it a preferred vendor for its customers as reasons XPO can take marketshare over time.
"We've deliberately built XPO like a bulletproof tank to surmount all kinds of challenges," Jacobs wrote.