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CHARLOTTE, N.C. - RXO Inc. (NYSE: RXO) reported fourth-quarter results that met earnings expectations but failed to excite investors, sending shares down nearly -5% in pre-market trading.
The transportation solutions provider posted adjusted earnings of $0.06 per share for the quarter, in line with analyst estimates. Revenue came in at $1.67 billion, slightly ahead of the $1.66 billion consensus forecast and up 70% YoY, largely due to the acquisition of Coyote Logistics.
Despite the revenue beat, RXO’s outlook for the first quarter of 2025 appeared to disappoint. The company expects adjusted EBITDA between $20 million and $30 million, with brokerage gross margin projected at 12-14%.
"The integration of Coyote Logistics remains ahead of schedule and we’re again raising our estimate for annualized cost synergies. We now expect to achieve at least $50 million in synergies," said Drew Wilkerson, CEO of RXO.
RXO reported a 10% sequential increase in combined brokerage volume for Q4. However, year-over-year volume declined 6%, with an 8% drop in full truckload partially offset by 1% growth in less-than-truckload.
The company’s Last Mile segment saw 15% YoY growth in stops, while its Managed Transportation pipeline expanded to nearly $2 billion in freight under management.
RXO’s gross margin contracted to 15.5% in Q4 from 18% a year earlier, reflecting continued softness in the freight market.
"While the freight market remains soft, our playbook of strategically investing in our business while controlling costs, along with our increased scale, positions us well for the future," Wilkerson added.
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