2020 will be a losing year for earnings growth in trucking and most industries around the world per XPO Logistics CEO

XPO Logistics founder and CEO Bradley Jacobs is never one to beat around the bush. And he sure held true to that standard in his new annual shareholder letter out Thursday morning.

“Things are difficult right now and they’ll get worse in the short-term. Then they’ll get much, much better. That’s what I see for XPO, our industry and the world,” Jacobs writes in the four-page letter.

Jacobs continues, “I’m a pragmatic bear in the short-term, because that’s the reality of COVID-19. We expect that 2020 will be a lost year for the earnings growth in our industry and most industries around the world. Our first priority is to keep our employees out of harm’s way. Second is our duty as an essential provider of transportation and logistics services. We’re helping communities get through this, so the economy can get back on its feet.”

The letter offers the first comments from a trucking industry executive on the state of economic affairs globally amidst the height of the coronavirus pandemic. And boy are they useful right now for investors struggling to make sense of it all. U.S. retail stores are closed down. Small businesses are closed down. Auto production has ground to a halt. Oil prices have crashed.

Uncertainty reigns supreme in Corporate America, which has led to severe reductions in capital expenditure and swift declines in business for transportation companies.

All of these factors have weighed on the outlook for railroads, truckers, and logistics providers such as XPO Logistics. The S&P 500 Trucking Index has declined 11% from its record high hit on Feb. 13. Meantime, the iShares Transportation Average has dropped 27% year to date.

Continue https://finance.yahoo.com/news/xpo-logistics-ceo-2020-will-be-a-losing-year-for-earnings-in-trucking-and-most-industries-around-the-world-115548835.html

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