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XPO Logistics, Inc. Slides 17% After the Bottom Line Disappoints

By Daniel Miller - Feb 25, 2016 at 12:57PM

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XPO Logistics has some work to do in incorporating its numerous acquisitions, and its fourth quarter reflected that in a widening loss.

Image source: XPO Logistics.

What: Shares of XPO Logistics (XPO -0.02%), a company with its own trucking fleet that also arranges freight transportation for customers, are sliding more than 17% during Thursday after the company released its fourth-quarter results that disappointed on the bottom line.

So what: During the fourth quarter, XPO recorded an adjusted net loss of just over $23 million, or $0.21 per share. That excluded special items but it fell far short of the consensus estimates per-share loss of $0.06, according to FactSet.

For the full-year 2015, XPO reported an adjusted net loss of just under $40 million, or $0.40 per share, which was better than the full-year consensus net loss of $0.51 per share. However, investors including deal costs witnessed the company's net loss widen from $9.9 million during the fourth quarter of 2014 to roughly $63 million during the recent fourth quarter -- but with the amount of acquisitions XPO has logged, it's a difficult comparison. On the bright side, revenue from businesses the company has owned for more than a year grew by 8.4% during the fourth quarter, which suggests top-line growth will be strong once all the recent acquisitions are folded in properly.

"Any company that has done 16 acquisitions in four years, their... earnings are going to be significantly affected," CEO Bradley Jacobs said, according to The Wall Street Journal. "We have positioned ourselves in a way that's growing faster than markets. We're not just growing with GDP we're not just growing with the industry."

Now what: The past 12 months for XPO have been a rough ride, with shares down nearly 50% over that time. However, the company should be able to rebound in the years ahead as it has a lot of potential to optimize its operations and consolidate redundant jobs from its number of acquisitions. Those incremental improvements and cost-cutting should lead to improvements and more consistency in its earnings going forward. If not, expect another painful couple of years for XPO's stock price. 

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