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XPO | No economic ‘hurricane’ on horizon, XPO executives say

icuicp

Well-Known Member
Top XPO Logistics Inc. executives have been telling investors over the past few weeks that they don’t share concerns that an economic “hurricane” is about to hit the U.S., saying they haven’t seen a dramatic decline in demand for the company’s services.

In one of the sessions, an XPO executive was asked why after spending four years acquiring and integrating 18 companies, it is selling or spinning off everything except its North American LTL business? The executive responded that XPO had “created a stock that relatively few investors were interested in” because it was a complex creature with many moving parts.

To earn Wall Street’s love, XPO began to shed virtually all of its assets, starting with its contract logistics business, now known as GXO Logistics Inc., (NYSE: GXO) which was spun off last summer. The company sold its intermodal business in March and has put its freight forwarding business up for sale. It will spin off its brokerage, final-mile and managed transportation operations by the end of 2021. It also plans at some point to sell or publicly list its European business.

It hasn’t helped much up to now. XPO shares, which traded at near $91 a share in mid-August, closed Wednesday at $45.70. Analysts, for their part, remain upbeat on the shares, with 12-month price targets in some cases of well over $100 a share.

From -
Freightwaves.com
 

OV-10

Well-Known Member
Top XPO Logistics Inc. executives have been telling investors over the past few weeks that they don’t share concerns that an economic “hurricane” is about to hit the U.S., saying they haven’t seen a dramatic decline in demand for the company’s services.

In one of the sessions, an XPO executive was asked why after spending four years acquiring and integrating 18 companies, it is selling or spinning off everything except its North American LTL business? The executive responded that XPO had “created a stock that relatively few investors were interested in” because it was a complex creature with many moving parts.

To earn Wall Street’s love, XPO began to shed virtually all of its assets, starting with its contract logistics business, now known as GXO Logistics Inc., (NYSE: GXO) which was spun off last summer. The company sold its intermodal business in March and has put its freight forwarding business up for sale. It will spin off its brokerage, final-mile and managed transportation operations by the end of 2021. It also plans at some point to sell or publicly list its European business.

It hasn’t helped much up to now. XPO shares, which traded at near $91 a share in mid-August, closed Wednesday at $45.70. Analysts, for their part, remain upbeat on the shares, with 12-month price targets in some cases of well over $100 a share.

From -
Freightwaves.com
Analysts can be bought and persuaded. It’s a industry itself that companies use to tout their stock . If You pay enough the analysts will say whatever you want. Oh, we got trouble right here in River city.

Big part of the prediction of an economic turn down it could possibly be the demise of Xpo … how low can we go with the share price.
 

FatChance

Active Member
Premium
Top XPO Logistics Inc. executives have been telling investors over the past few weeks that they don’t share concerns that an economic “hurricane” is about to hit the U.S., saying they haven’t seen a dramatic decline in demand for the company’s services.

In one of the sessions, an XPO executive was asked why after spending four years acquiring and integrating 18 companies, it is selling or spinning off everything except its North American LTL business? The executive responded that XPO had “created a stock that relatively few investors were interested in” because it was a complex creature with many moving parts.

To earn Wall Street’s love, XPO began to shed virtually all of its assets, starting with its contract logistics business, now known as GXO Logistics Inc., (NYSE: GXO) which was spun off last summer. The company sold its intermodal business in March and has put its freight forwarding business up for sale. It will spin off its brokerage, final-mile and managed transportation operations by the end of 2021. It also plans at some point to sell or publicly list its European business.

It hasn’t helped much up to now. XPO shares, which traded at near $91 a share in mid-August, closed Wednesday at $45.70. Analysts, for their part, remain upbeat on the shares, with 12-month price targets in some cases of well over $100 a share.

From -
Freightwaves.com
Right there, the proverbial Kiss of Death!
 

OV-10

Well-Known Member
Right there, the proverbial Kiss of Death!
Their wishing it away . Their saying “we’re busy now so all is good”
See ,the thing is a recession or even more the threat of one, pushes the stock price even lower . They need to keep that word in check . All hands on deck for the executives. Play the “R” word down ..
 

Don Draper

Member
These guys are freaking out. I already see it, meetings telling guys everything is fine..you can see it in there eyes. They are all on the chop block from the brass down to the hourly. The amount of finger pointing I see lately is ridiculous.
 

OV-10

Well-Known Member
These guys are freaking out. I already see it, meetings telling guys everything is fine..you can see it in there eyes. They are all on the chop block from the brass down to the hourly. The amount of finger pointing I see lately is ridiculous.
100%
 

icuicp

Well-Known Member
Part of that investment ( into XPO freight ) will be directed at building more truck trailers in-house and adding more drivers, steps that XPO believes will reduce its overreliance on expensive third-party transportation known as “purchased transportation.” Until the pandemic, about 25% of XPO’s line-haul miles were operated by third-party providers, down from 35% in 2015. “The goal is to bring that percentage down to closer to 5% over time,” an executive said.

XPO spent $136 million on purchased LTL transportation in the first quarter, up 44% from the 2021 quarter.
Supply chain problems, notably with a continued dearth of microchips embedded in vehicles, are constraining in-house capacity utilization, an executive said. “We could take three times as many tractors as we’re currently getting” from truck manufacturers, one of the executives said.

From - Freightwaves.com
 

icuicp

Well-Known Member
XPO's Debt is TOO high to attract the large institutional investors it wants

One challenge for XPO is convincing investors it can reduce its net debt — or leverage — to levels of around one times EBITDA. XPO has reduced its leverage ratio to two times EBITDA from 2.7 times EBITDA last year. Still, the current ratio ( of debt ) remains too high to attract a wide swath of institutional money, an executive said.

“We have a list of hundreds of institutions that own [shares of] our competition or similar companies but don’t own us,” the executive said. Of those, more than half won’t buy XPO shares because of its current debt position, the executive said.

“We think there are roughly 500 institutions that could open up once we [bring] the leverage down,”
the executive said.

From - Freighwaves.com
 

OV-10

Well-Known Member
XPO's Debt is TOO high to attract the large institutional investors it wants

One challenge for XPO is convincing investors it can reduce its net debt — or leverage — to levels of around one times EBITDA. XPO has reduced its leverage ratio to two times EBITDA from 2.7 times EBITDA last year. Still, the current ratio ( of debt ) remains too high to attract a wide swath of institutional money, an executive said.

“We have a list of hundreds of institutions that own [shares of] our competition or similar companies but don’t own us,” the executive said. Of those, more than half won’t buy XPO shares because of its current debt position, the executive said.

“We think there are roughly 500 institutions that could open up once we [bring] the leverage down,” the executive said.

From - Freighwaves.com
This does not instill confidence in them.
Expect cost cutting and it’s not going to be fun. I have always maintained drivers will eventually take the brunt despite the shortage.
Good thing their not bound to a contract with us.
 
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OV-10

Well-Known Member
“In one of the sessions, an XPO executive was asked why after spending four years acquiring and integrating 18 companies, it is selling or spinning off everything except its North American LTL business. The executive responded that XPO had “created a stock that relatively few investors were interested in” because it was a complex creature with many moving parts.”

Like I said from the time they bought us. It’s never been about anything but that share price. Everything other than that has been hyperbole and spin.

Xpo/ Conway driver should be proud out of all the other entities (18 in all ) we were the only one worth anything.
 
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OV-10

Well-Known Member
XPO executives said they are about to embark on the “next phase” of the company’s LTL strategy, which is to dramatically grow the unit’s revenue while maintaining healthy margins. XPO has focused on cost-cutting-driven margin expansion since it entered the LTL business in 2015 by acquiring Con-way Inc. for $3 billion. To an extent, however, the company sacrificed top-line growth by not investing heavily in the business.

“We went into LTL with the plan to put 3% to 4% of revenue” into capital spending and still achieve a robust multiple, one executive said. What XPO discovered was that some competitors put as much as 15% of their revenue into capex, and came away with twice the valuation multiples, the executive said.

“The market wants to see growth, not just margin expansion,” the executive said. “We’re going to invest in the fleet and network. We’re going to substantially increase our capex, and we’re going to grow the top line in addition to growing margin.”


Just like I have been saying . Cutting cost on everything, maintenance, safety and compensation all along . It’s was a bad decision on their part. It will probably cost them the business now. To little too late.
 

Fly-by-night

Only when you care to send the very best
XPO executives said they are about to embark on the “next phase” of the company’s LTL strategy, which is to dramatically grow the unit’s revenue while maintaining healthy margins. XPO has focused on cost-cutting-driven margin expansion since it entered the LTL business in 2015 by acquiring Con-way Inc. for $3 billion. To an extent, however, the company sacrificed top-line growth by not investing heavily in the business.

“We went into LTL with the plan to put 3% to 4% of revenue” into capital spending and still achieve a robust multiple, one executive said. What XPO discovered was that some competitors put as much as 15% of their revenue into capex, and came away with twice the valuation multiples, the executive said.

“The market wants to see growth, not just margin expansion,” the executive said. “We’re going to invest in the fleet and network. We’re going to substantially increase our capex, and we’re going to grow the top line in addition to growing margin.”


Just like I have been saying . Cutting cost on everything, maintenance, safety and compensation all along . It’s was a bad decision on their part. It will probably cost them the business now. To little too late.
Heard Tim Staroba, east coast LTL VP was at you place and saw first hand what a 3% capital spending is doing from what I see when I VIA more like 0%. Did Sears get clean-up from the ceiling tile breaking on him. I sure there was plenty of soap and paper towel to add in his clean up.
It is funny though when they say they have a hard time hiring people and all you have to ask is....What have you done to improve the working condition here at____, fill in with SIC code. Like dock door curtians or bumper to help with the cold, or ceiling fans for the summer
 
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