What Happened:
Shares of freight delivery company XPO (NYSE:XPO) fell 12.1% in the morning session after the company provided underwhelming preliminary Less-Than-Truckload (LTL) operating metrics for August 2024. Amidst a soft demand environment, LTL tonnage per day decreased by 4.6% year on year. This decline was driven by a 4.5% decrease in shipments per day (fewer individual shipments) and a slight decrease in weight per shipment.
Chief Executive Officer Mario Harik added, "In August, we managed our variable costs effectively in a soft demand environment, supporting our outlook for margin expansion. The industry pricing backdrop remains constructive, and we're executing our company-specific initiatives to deliver strong above-market yield growth. Our ongoing service improvements and network investments will further accelerate our results when industry demand rebounds."
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What is the market telling us:
XPO’s shares are very volatile and over the last year have had 8 moves greater than 5%. But moves this big are very rare even for XPO and that is indicating to us that this news had a significant impact on the market’s perception of the business.
XPO is up 19.8% since the beginning of the year, but at $101.71 per share it is still trading 20.9% below its 52-week high of $128.64 from April 2024. Investors who bought $1,000 worth of XPO’s shares 5 years ago would now be looking at an investment worth $1,415.
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