The Register Citizen (Torrington, CT)
XPO revenues and profits dip in first quarter
Transportation-and-logistics giant XPO Logistics on Tuesday reported lower revenues and profits for the past quarter, as it faced disruption from the coronavirus crisis.
The Greenwich-based firm’s first-quarter revenues totaled about $3.9 billion, down 6 percent from the same period in 2019. Quarterly profits amounted to $23 million, compared with $47 million a year ago — a drop that reflected higher operating expenses.
“We had a strong January and a strong February — then the pandemic sharply disrupted our end markets,” CEO and Chairman Bradley Jacobs said on a call Tuesday with investment analysts. “It started with our European operations in early March and began to affect parts of our North American business later in the month.”
In an apparent sign of investor optimism about the company’s prospects, XPO shares closed Tuesday at about $69, up 8 percent from their Monday finish. At their 52-week high, they reached $100.
With its services classified as essential by the federal government, XPO has maintained its operations across the country. The No. 180 company on last year’s Fortune 500 list employs about 50,000 in the U.S., accounting for about half of its global workforce.
XPO officials said that they have responded to the coronavirus pandemic with a number of measures, including procuring personal protective equipment and instituting social-distancing practices and “pro-active” cleaning schedules at its facilities.
To encourage employees to stay home when they are ill, the company said it has provided two extra weeks of paid sick leave for employees in the U.S. and Canada.
At the same time, it has announced “frontline appreciation pay” for nearly 40,000 employees in the U.S. Hourly warehouse workers are receiving an extra $2 per hour on top of their regular rates.
Later this month, fulltime employees at service centers for its less-thantruckload division are set to receive a $500 bonus, while part-time staff would collect a $250 bonus.
The company said it has also added free COVID-19 testing to its U.S. health insurance coverage and provided free access to telehealth services.
“I’m proud of the work our people are doing around the world,” Meghan Henson, XPO’s chief human resources officer, said on the call. “We’ll continue to put their safety and wellbeing first.”
The crisis has also prompted the company to rethink some of its major initiatives.
In January, it had announced a strategic review to examine the potential sale or spin-off of one or more of its businesses, not including its North American lessthan-truckload shipping division.
In March, the company terminated that undertaking.
“The strategic review process is completely off the table; it’s yesterday’s news,” Jacobs said.
In its only sale so far, XPO transferred in October 2016 its truckload business to the Canada-based TransForce for $558 million.
XPO was already facing major challenges before the pandemic emerged. Last year, it disclosed that it would lose approximately $600 million in returns from its largest customer, equal to about two-thirds of its business from that firm. The company has not named the client, but it has been widely reported to be Amazon.
“Like all crises, this pandemic has a beginning, a middle and an end,” Jacobs said. “We’re in the middle of it now, and it will end. XPO will emerge far stronger than we were pre-COVID (19).”
It is headquartered at 5 American Lane, in the northwest corner of Greenwich.