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XPO Logistics jump 13% on cost-cutting, e-commerce growth
Published May 05, 2020 11:07AM ET
© Reuters.
LOS ANGELES (Reuters) - XPO Logistics Inc (N:XPO) shares jumped almost 13% on Tuesday after executives said its e-commerce fulfillment, returns and home delivery businesses are thriving during the novel coronavirus pandemic.
"E-commerce saved us in April... It was our strongest performing vertical across the board," Chief Strategy Officer Matthew Fassler said on a conference call with analysts.
XPO is courting new e-commerce business and squeezing costs via warehouse and other automation projects since losing two-thirds - or $600 million - of its Amazon.com Inc (O:AMZN) business early last year.
The company's shares, which topped $114 in September 2018, jumped almost 13% to $71.85 in early trading on Tuesday and were at $68.96, up 8%, in late morning.
The company's e-commerce services include pack and ship, returns management and "last mile" delivery of big and bulky items like furniture and exercise equipment - all of which have seen an uptick due to stay-at-home orders aimed at slowing the spread of the novel coronavirus that has killed more than 250,000 people around the world.
Online sales of products for home offices, home improvement and do-it-yourself projects are up, said XPO executives, who noted increased shipments of everything from home gym equipment and electronics to appliances and home and garden supplies.
"E-com is a good place to be right now. And fortunately, we have a good exposure to it. It's not the majority of our business, though," Fassler said.
The transportation and warehousing company, which does not break out e-commerce results separately, on Monday said net profit tumbled more than 51% in the first quarter. Its core transportation segment revenue declined almost 8%, due to demand destruction wrought by the pandemic and the loss of business from Amazon.
Excluding e-commerce and food and beverage, "all other parts of transportation logistics did not perform well from the middle of March until the end of April," Fassler said.
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