- XPO reported a $94 million net loss — $0.81 per share — in Q4, blaming costs related to the November spinoff of its brokerage, RXO, which it executed in pursuit of higher investor valuation as a pure-play LTL.
- The net loss included a $64 million non-cash goodwill impairment charge related to XPO’s European business segment, as well as $42 million in transaction and integration costs and $35 million in restructuring charges related to the spinoff.
- “When you adjust for these one-time items, you see that our EPS in the quarter was $0.98, which is a 53% YoY increase,” XPO Chief Investor Relations Officer Tavio Headley said in an interview with Transport Dive. “We're very pleased.”
Following the RXO spinoff, XPO hoped to sell its European business. But it paused its plans to divest the unit in December, citing weakened capital markets.
Despite the loss, XPO generated $1.8 billion in Q4 revenue — more than $1 billion from its North American LTL segment. The carrier took on market share in the quarter as revenue grew to $7.7 billion on the year.
While others in LTL pinned their hopes on a freight rebound in the spring, XPO’s tonnage and shipment counts continued to rise in Q4. Tonnage rose 0.9% YoY, driven by a 1.5% increase in shipments.
“Yield came in at the low end of our outlook, reflecting a strategic change in channel mix that we believe will be a tailwind for both volume and yield as freight demand improves,” CEO Mario Harik said in a statement.
January tonnage increased YoY and trended better than typical seasonality, the company said.
The chief investor relations officer attributed XPO’s ability to grow volumes in a challenging freight environment to the company’s LTL 2.0 plan, including investments in capacity and service quality.
“We're hearing from our customers, including blue chip customers, as we onboard them,” Headley said. “They're telling us that the onboarding experience is seamless. And they've actually rewarded us with additional business in other parts of the country.”