Bearish stock to watch: XPO Logistics Inc (NYSE: XPO)

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XPO Logistics Inc (NYSE: XPO) stock lost over 0.7% on 11th Feb, 2020 (as of 10:10 am GMT-5; Source: Google finance) after the company’s fourth quarter of FY 19 and appointed a new Chief Financial Officer. As per the review of strategic alternatives, the company may possibly 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 plan to sell or spin off its North American less-than-truckload unit.

The company has reported fourth-quarter net income of $107 million compared with $91 million in the year-ago period.  XPO in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.12, but adjusted revenue of $4.14 billion in the fourth quarter of FY 19, missing the analysts’ estimates for revenue of $4.23 billion. Operating income had increased to $202 million for the quarter, compared to $126 million for the same period in 2018.

For the first quarter, analysts project adjusted earnings to be of 66 cents a share on sales to be of $4.2billion.

For the fiscal 2020, the company expects organic revenue growth to be of 3% to 5% year-over-year, adjusted EBITDA is expected to be in the range of $1.785 billion to $1.835 billion, an increase of 7% to 10% year-over-year, free cash flow is expected to be in the range of $600 million to $700 million, net capital expenditures is expected to be in the range of $475 million to $525 million, depreciation and amortization is expected to be in the range of $700 million to $750 million, effective tax rate is expected to be in the range of 24% to 27% and cash taxes is expected to be in the range of $155 million to $180 million. The company’s 2020 projection for free cash flow and cash taxes assume cash interest expense to be in the range of $285 million to $305 million. The company’s 2020 target for free cash flow includes an incremental benefit to free cash flow to be in the range of $50 million to $70 million from trade receivables programs.

Meanwhile, the company has appointed David Wyshner as the chief financial officer, effective from March 2, 2020.

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