Why Shares of XPO Logistics Are Falling Today
Shares of XPO Logistics (NYSE: XPO) fell more than 11% on Friday morning after the transportation company reported second-quarter earnings. XPO did report a loss in what was a noisy quarter due to the COVID-19 pandemic and a number of one-time items, but the sell-off appears to be an overreaction to what seems to have been a decent quarter.
After markets closed Thursday XPO reported a second-quarter loss of $0.63 per share on revenue of $3.5 billion, beating analyst expectations for a $0.73 per share loss on revenue of $3.38 billion. The company reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $172 million, ahead of the $166 million estimate.
Investors went into earnings season expecting transport companies to report issues due to the pandemic, which has disrupted economic activity. But XPO shares on Friday could be under pressure in part because United Parcel Service and other transport companies have surprised Wall Street with unexpectedly strong reports, setting expectations sky-high for the sector.
Source Fool.com
