RXO’s financial performance saw an improvement in the fourth quarter of 2023 compared to the third quarter. However, year-to-year comparisons painted a different picture, prompting Barclays analyst Brandon Oglenski to ask tough questions during the 3PL’s earnings call. While the management at RXO remained optimistic, Oglenski pointed out the decline in gross margin from $218 million in the fourth quarter of 2022 to $173 million in the third quarter of 2023, before a slight recovery to $176 million in the fourth quarter. Despite challenges in the market, CEO Drew Wilkerson highlighted RXO’s outperformance compared to its peers and emphasized growth in volume with strong margins. The company’s brokerage business saw positive metrics, including a 15% increase in loads per head per day and growth in truckload and LTL volumes. RXO’s brokerage contract volume and sales pipeline showed promising trends for future growth. However, investors were concerned, leading to an 8.27% drop in RXO’s stock price. The company’s revenue declined by 9% to $1 billion, accompanied by a drop in net income and adjusted EBITDA margin. RXO CFO James Harris expressed confidence in a potential freight market recovery in the second half of the year, despite challenges faced in the first quarter.
