GREENWICH, Connecticut-based trucking and third-party logistics provider XPO Logistics has lowered its profit projections for next year, further accelerating a recent sell-off of the company's stock.
The company now expects growth of between 12 per cent and 15 per cent in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), down from a prior forecast of 15 per cent to 18 per cent, according to a filing with the US Securities and Exchange Commission.
Analysts have pointed out that 12 per cent to 15 per cent earnings growth is still nothing to sneeze at, but investors apparently are unconvinced, reports American Shipper.
It's been a rough couple of months for XPO, with federal lawmakers earlier this month calling for an investigation into alleged 'disturbing treatment' of employees at company-operated warehouses following reports from The New York Times and Los Angeles Times of pregnancy discrimination, sexual harassment and unsafe working conditions.
Seemingly unrelated to the lowering of the company's internal earnings expectations, investment firm Spruce Point Capital recently released a scathing report in which it downgraded XPO's stock rating to a 'strong sell'.
The report cited 'a US$4.7 billion debt overhang, flawed business model, questionable governance, dubious financial and accounting methods, increased regulatory scrutiny, and a loss of confidence in management' as the primary reasons for the downgrade.
'XPO is dependent on external capital, asset sales, and factoring receivables to survive and is covering up a working capital crunch that can been seen by bank overdrafts,' said Spruce Point. 'As credit conditions tighten, cost of capital increases, and XPO's business practices come under greater scrutiny, its share price could swiftly collapse in Enron-style fashion. US Senators are already investigating XPO's labour and safety practices, but we believe they should also review our report.'
WORLD SHIPPING
The company now expects growth of between 12 per cent and 15 per cent in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), down from a prior forecast of 15 per cent to 18 per cent, according to a filing with the US Securities and Exchange Commission.
Analysts have pointed out that 12 per cent to 15 per cent earnings growth is still nothing to sneeze at, but investors apparently are unconvinced, reports American Shipper.
It's been a rough couple of months for XPO, with federal lawmakers earlier this month calling for an investigation into alleged 'disturbing treatment' of employees at company-operated warehouses following reports from The New York Times and Los Angeles Times of pregnancy discrimination, sexual harassment and unsafe working conditions.
Seemingly unrelated to the lowering of the company's internal earnings expectations, investment firm Spruce Point Capital recently released a scathing report in which it downgraded XPO's stock rating to a 'strong sell'.
The report cited 'a US$4.7 billion debt overhang, flawed business model, questionable governance, dubious financial and accounting methods, increased regulatory scrutiny, and a loss of confidence in management' as the primary reasons for the downgrade.
'XPO is dependent on external capital, asset sales, and factoring receivables to survive and is covering up a working capital crunch that can been seen by bank overdrafts,' said Spruce Point. 'As credit conditions tighten, cost of capital increases, and XPO's business practices come under greater scrutiny, its share price could swiftly collapse in Enron-style fashion. US Senators are already investigating XPO's labour and safety practices, but we believe they should also review our report.'
WORLD SHIPPING