LOS ANGELES (Reuters) - XPO Logistics Inc (XPO.N) shares jumped almost 13% on Tuesday after executives said its e-commerce fulfillment, returns and home-delivery businesses were thriving during the coronavirus pandemic.
“E-commerce saved us in April... It was our strongest- performing vertical across the board,” Chief Executive Officer Bradley Jacobs 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 (AMZN.O) business early last year.
The company’s stock, which topped $114 in September 2018, were up 8% at $68.86 in afternoon trading, after earlier jumping almost 13%.
XPO’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 these 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.
XPO is also the largest provider of fulfillment services for e-commerce in Europe, which is beginning to reopen after coronavirus-related business closures, they said.
“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,” Jacobs 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%, as demand shriveled up due to the pandemic and the loss of business from Amazon.
Last mile revenue was down 10% from a year ago. Excluding postal injection - a service it provided to Amazon and exited in the middle of the first quarter last year - “growth in our core last mile, heavy goods business accelerated to 9% year-over-year,” Chief Strategy Officer Matthew Fassler said.
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,” Jacobs said.
“We look at 2020 as kind of a lost year for earnings growth,” said Jacobs, who vowed to seize opportunities in e-commerce and other pockets of strength.
Executives said XPO has ample liquidity to manage the global health crisis.
A spokeswoman said XPO did not receive any funding under the Coronavirus Aid, Relief and Economic Security (CARES) Act. Rivals United Parcel Service Inc (UPS.N) and FedEx Corp (FDX.N) also declined to participate in the program.
Reporting by Lisa Baertlein in Los Angeles; Editing by Dan Grebler, Jonathan Oatis and Bernadette Baum