XPO rev­enues drop in Q1

The News-Times - - BUSINESS - By Paul Schott [email protected]­for­dad­vo­cate.com; 203-964-2236; Twit­ter: @paulschott

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.

Con­trib­uted photo

Transporta­tion-and-lo­gis­tics spe­cial­ist XPO Lo­gis­tics is head­quar­tered in Green­wich.

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