CHARLOTTE, N.C. - RXO Inc. (NYSE: RXO) reported third-quarter earnings that fell short of analyst expectations, sending shares down 4.5% in premarket trading on Thursday.
The transportation solutions provider posted adjusted earnings of $0.05 per share, missing the consensus estimate of $0.13. Revenue came in at $1.04 billion, slightly below analysts' projections of $1.05 billion but up 6.6% YoY.
RXO's brokerage business, which accounts for the majority of revenue, saw gross margin decline to 13.7% from 15.1% a year ago as the freight market remained soft. However, the company's complementary services segment showed improvement, with gross margin expanding to 21.5% from 20.0% last year.
"In the third quarter, our focus on execution enabled us to achieve a solid 13.7% gross margin in our Brokerage business, despite the prolonged soft freight market," said CEO Drew Wilkerson in a statement.
The company highlighted progress in its Managed Transportation unit, which secured over $300 million in new business during the quarter. RXO's Last Mile delivery segment also saw 11% YoY growth in stops.
For the fourth quarter, RXO expects adjusted EBITDA between $40 million and $45 million, with brokerage gross margin projected at 12-14%.
The earnings miss comes as RXO works to integrate its recently completed acquisition of Coyote Logistics. Management raised its cost synergy target for the deal to at least $40 million annually.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.