RXO (NYSE:RXO) Releases Quarterly Earnings Results, Beats Estimates By $0.02 EPS

RXO (NYSE:RXO) announced its quarterly earnings results on Thursday. The company reported $0.06 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.04 by $0.02, FiscalAI reports. RXO had a negative net margin of 1.72% and a negative return on equity of 0.98%. The company had revenue of $1.77 billion for the quarter, compared to analysts’ expectations of $1.63 billion. During the same quarter in the previous year, the company earned $0.04 earnings per share. RXO’s quarterly revenue was up 25.0% on a year-over-year basis.

Here are the key takeaways from RXO’s conference call:

• Brokerage momentum improved significantly: truckload volume grew 2% year over year, outperforming the market, while truckload gross profit per load increased 11% sequentially as spot mix rose 900 basis points to 42%.
• RXO raised confidence in near-term performance, citing continued July strength, a 50% truckload spot mix, and expectations for low- to mid-single-digit brokerage volume growth in the third quarter. The company expects third-quarter adjusted EBITDA of $35 million to $45 million and sees a path to the high end.
• Complementary businesses added support, with Last Mile stops up 3% and Managed Transportation winning approximately $100 million of freight under management in Q2 and another $100 million in July. Management also said managed expedite volume rose nearly 30% year over year.
• Agentic AI deployment is gaining traction, with five times more spot quotes processed through the email agent and a 25% sequential increase in digital carrier offers; management said the tools are improving volume, margins, productivity, and service while reducing headcount intensity.
• Last Mile is expected to weaken more than normal seasonality in Q3 because of softer customer demand and higher carrier costs, creating a sequential headwind of approximately $3 million to $5 million. Adjusted free cash flow was negative $42 million in Q2 due primarily to working-capital needs, while net leverage stood at 4.1 times.

RXO Stock Up 7.7%

Shares of RXO stock traded up $1.55 during trading hours on Friday, hitting $21.79. 2,133,694 shares of the company’s stock traded hands, compared to its average volume of 2,203,756. The company has a quick ratio of 1.27, a current ratio of 1.27 and a debt-to-equity ratio of 0.30. The stock’s fifty day simple moving average is $26.10 and its two-hundred day simple moving average is $20.09. RXO has a 12-month low of $10.43 and a 12-month high of $29.90. The stock has a market cap of $3.59 billion, a price-to-earnings ratio of -35.72 and a beta of 2.10.

RXO News Summary

Here are the key news stories impacting RXO this week:

• Positive Sentiment: RXO highlighted market-share gains and profitable volume growth, including a 2% increase in truckload brokerage volume and a record sequential improvement in gross profit per load. Market Share Gains and Improved Profitability Drive Strong Second-Quarter Results for RXO
• Positive Sentiment: The earnings and revenue beats, along with stronger-than-expected operating metrics, helped drive investor enthusiasm and a positive premarket reaction. RXO Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Citizens JMP upgraded RXO from “market perform” to “outperform” and set a $30 price target, while Truist maintained a “buy” rating with a $28 target, both implying meaningful potential upside. Analyst Ratings
• Neutral Sentiment: Citi lowered its price target from $30 to $23 and shifted to a “neutral” rating, reflecting more cautious expectations despite the quarterly beat. Citi Analyst Action
• Negative Sentiment: Some analysis argues that RXO’s strong revenue growth was driven largely by higher freight rates and fuel prices, while gross profit declined and adjusted EBITDA remained flat. Rising working-capital requirements and leverage also raise concerns about the quality and durability of the recovery. RXO Still Unable To Capture Upcycle Economics

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Corient Private Wealth LLC bought a new position in RXO during the 4th quarter valued at approximately $152,000. Invesco Ltd. boosted its holdings in RXO by 22.6% in the fourth quarter. Invesco Ltd. now owns 1,172,748 shares of the company’s stock worth $14,824,000 after acquiring an additional 216,399 shares in the last quarter. Mercer Global Advisors Inc. ADV boosted its holdings in RXO by 41.1% in the fourth quarter. Mercer Global Advisors Inc. ADV now owns 15,436 shares of the company’s stock worth $195,000 after acquiring an additional 4,499 shares in the last quarter. Mackenzie Financial Corp purchased a new stake in shares of RXO in the fourth quarter worth $129,000. Finally, Empowered Funds LLC purchased a new stake in shares of RXO in the fourth quarter worth $660,000. Institutional investors own 92.73% of the company’s stock.

Wall Street Analysts Forecast Growth

Several research firms have weighed in on RXO. BMO Capital Markets started coverage on RXO in a research report on Monday, July 13th. They set an “outperform” rating and a $35.00 price objective on the stock. TD Cowen decreased their target price on RXO from $19.00 to $17.50 and set a “sell” rating for the company in a research report on Friday. Morgan Stanley restated an “equal weight” rating and issued a $22.00 target price (up from $19.00) on shares of RXO in a research note on Thursday, May 7th. Weiss Ratings upgraded RXO from a “sell (e+)” rating to a “sell (d-)” rating in a research report on Thursday, June 4th. Finally, The Goldman Sachs Group upped their price target on RXO from $18.00 to $20.00 and gave the stock a “neutral” rating in a research note on Thursday, July 16th. Five investment analysts have rated the stock with a Buy rating, ten have issued a Hold rating and four have assigned a Sell rating to the company’s stock. According to MarketBeat.com, the stock currently has an average rating of “Hold” and an average price target of $23.85.

RXO Company Profile

RXO Inc (NYSE: RXO) is a leading asset-light provider of digital freight brokerage and managed transportation solutions. The company leverages a proprietary technology platform to connect shippers with a network of third-party carriers, enabling optimized route planning, real-time shipment tracking, and dynamic pricing. RXO’s end-to-end service model spans full truckload, less-than-truckload (LTL), intermodal and cross-border freight movements, designed to improve efficiency and reduce transportation costs for its customers.

Operating primarily across North America, RXO serves a diverse base of shippers in industries ranging from retail and consumer goods to manufacturing and automotive.