Trucking Company XPO Releases Some Quarterly Results Ahead Of Its Brokerage Spinoff

(CTN News) – On Monday, XPO Logistics said it expects to post lower third-quarter revenue than analysts expected.

In addition, XPO expects its earnings before interest, taxes, depreciation and amortization to be higher than expected.

Incoming CEO Mario Harik told CNBC on Monday that adjusted EBITDA would be between $348 million and $352 million, which is higher than the top end of the company’s guidance.

It appears that we are entering the spin from a position of strength based on today’s numbers.”

When XPO posts its quarterly earnings report on Oct. 31, it expects to report $3.04 billion. Refinitiv surveyed analysts who expect $3.09 billion.

RXO will spin off its high-tech truck brokerage business into a new publicly traded company on Nov. 1, and the company will host its first investor day under the incoming CEO Harik on Tuesday.

Since the spinoff announcement in March, shares have fallen 19%, compared to a 12% decline in the S&P 500.

Former XPO CEO Brad Jacobs stated on Squawk Box in March that he hoped that by turning into a pure-play trucker, the “conglomerate discount” would be eliminated.

During the first year of operation, RXO expects revenue to decrease 2% year over year and volume to increase 9%.

According to the latest data from Evercore ISI, truck brokerage rates declined 22% year over year in October, but are still 20% higher than they were in October of last year before the pandemic.

FedEx Freight and Old Dominion compete with XPO, which has a market capitalization of approximately $5.6 billion. Caterpillar and Tractor Supply are among its customers.

Furthermore, XPO set goals for both and RXO by the end of fiscal year 2027. According to the company, the trucking operation is expected to grow revenues at a compound annual rate of 6% to 8%, while adjusted EBIDTA is expected to grow by 11% to 13% annually.

With an annual spending rate of about 1% of revenue, the company expects to achieve adjusted EBITDA of $475 million to $525 million by then.

According to the long-term guidance we issued, both and RXO are expected to continue to perform well.

Last year, XPO’s contract logistics business was spun off into GXO, which began trading.

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