Transport and logistics company XPO Logistics Inc. saw both its revenues and profits drop slightly in 2019—blaming the shortfall on the loss of its "largest customer"— and said it was continuing with plans to spin off "one or more" of its business units, the company said today.
The company also said it had hired a new chief financial officer with expertise in completing major asset sales, spin-offs, and acquisitions. The new hire, David Wyshner, will replace acting CFO Sarah Glickman on March 2, as Glickman moves into a role as senior vice president for corporate finance and transformation.
For the full year of 2019, XPO reported total revenue of $16.65 billion, compared with $17.28 billion for 2018, the Greenwich, Conn.-based company said. Net income attributable to common shareholders fell to $379 million for 2019, compared with $390 million for 2018.
Despite the slumping numbers, XPO Chairman and CEO Bradley Jacobs pointed to better results as measured by another accounting metric, saying its earnings per diluted share was $3.57 for 2019, compared with $2.88 for 2018. However, that outcome was primarily the result of XPO's decision to shift its strategy from investing in mergers and acquisitions to buying back its own shares, the company said. From December 14, 2018 through December 31, 2019, the company repurchased 35.2 million shares of XPO common stock at an average price of $53.42 per share, XPO said.
"We delivered a good fourth quarter and a good year. I'm particularly pleased that we grew fourth quarter EPS by 50% year-over-year, and adjusted EPS by 56%. We also increased net income by 18% and adjusted EBITDA by 14% in the quarter," Jacobs said in a release, referring to the acronym for earnings before interest, taxes, depreciation, and amortization (EBITDA).
"In our less-than-truckload unit, where we have several new technologies in place, the operating ratio was 83.9%, and the adjusted operating ratio was a fourth quarter record at 82.3%," Jacobs said. "In truck brokerage, we increased volume year-over-year with lower headcount, propelled by our XPO Connect digital platform. Our technology also helped our logistics segment generate a double-digit adjusted EBITDA margin in the quarter for the first time since 2015."
Looking into 2020, XPO plans to continue with its plan to consider the sale or spin-off of one or more business units. "The company has not determined which, if any, business units will be sold or spun off. However, the company does not intend to sell or spin off its North American less-than-truckload unit," XPO said in the release.