XPO revenues drop in Q1
GREENWICH — Revenues and profits dipped in the first quarter for transportation-and-logistics giant XPO Logistics, reflecting a recent nine-figure loss of business from its largest customer, the company reported this week.
Revenues dropped about 2 percent yearover-year, to $4.12 billion. Profits fell to $43 million, from $67 million a year ago.
XPO officials disclosed in February a
$600 million hit, worth two-thirds of its transactions with a client that it is widely believed to be Amazon. Its results were also affected by foreign-currency exchange factors, increased interest expenses and a higher effective tax rate.
Executives said they were still optimistic about the company’s future, pointing to it closing in the past quarter on $1.1 billion of new business, up 15 percent year-over-year. XPO also grew its sales pipeline to a record
$4.1 billion.
“I don’t think we’re 100 percent out of the woods yet on the curveballs we’ve had in the last year, but we’re making excellent progress — faster progress than I would have expected three months ago,” XPO CEO Bradley Jacobs said on a call Thursday with investment analysts.
Company shares closed Thursday at about $64, down 4.5 percent from their Wednesday finish.
XPO officials also said they did not anticipate that the controversy embroiling “top 20” customer Boeing will affect financial performance. Two of Boeing’s 737 Max 8 planes were involved in fatal crashes last October, in Indonesia, and last February, in Ethiopia, that killed a total of over
350 people.
“The issues they’ve got with their various products have not affected us for the time being,” Jacobs said. “We’re going to watch it and see how it develops. It could, potentially, in the future. But it wouldn’t be material to our overall results.”
Meanwhile, XPO has faced growing scrutiny of its labor practices.
It announced in February that a warehouse in Memphis, Tenn., that is the source of employee allegations of pregnancy discrimination and sexual harassment, will close due to what XPO described as an “overall business model change” by the plant’s customer, which is believed to be Verizon.
All of the facility’s 375 hourly workers will be able to get new jobs — at the same wage levels and without having to apply again — at 11 other Memphis-area distribution centers, XPO said.
In addition, XPO plans to hire 80 for a new warehouse opening across the street from the facility that is closing.
The International Brotherhood of Teamsters union — which does not represent any of the center’s workers, but is an outspoken critic of XPO’s labor practices — has described the shutdown as retaliation.
XPO said it has a “strict no-retaliation policy in place that applies to the company, as well as individuals.”
As media coverage of the Memphis facility grew, the company announced last December a new policy for the care and support of pregnant workers that includes paid family leave, pregnancy and postpartum benefits, and flexible working arrangements. Eligible workers will receive their regular base wages while they used their accommodations and will still qualify for pay increases during that time.
In February, XPO announced a program for U.S. employees and their families that gives them mobile-app access to a network of more than 1,400 health practitioners across 20 specialties, including fertility, lactation, infant sleep, nutrition and mental health.