RXO (NYSE:RXO) Posts Quarterly Earnings Results, Beats Expectations By $0.02 EPS

RXO (NYSE:RXO) issued its quarterly earnings data on Thursday. The company reported $0.06 EPS for the quarter, beating analysts’ consensus estimates 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 firm had revenue of $1.77 billion for the quarter, compared to analysts’ expectations of $1.63 billion. During the same period in the prior year, the company earned $0.04 EPS. The firm’s 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 Price Performance

RXO stock traded up $1.55 during midday trading on Friday, reaching $21.79. 2,133,694 shares of the company were exchanged, compared to its average volume of 2,203,756. The firm’s 50-day simple moving average is $26.10 and its 200-day simple moving average is $20.09. RXO has a 1 year low of $10.43 and a 1 year high of $29.90. The company has a market capitalization of $3.59 billion, a price-to-earnings ratio of -35.72 and a beta of 2.10. The company has a debt-to-equity ratio of 0.30, a quick ratio of 1.27 and a current ratio of 1.27.

Trending Headlines about RXO

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

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Thrivent Financial for Lutherans boosted its stake in shares of RXO by 1.0% in the second quarter. Thrivent Financial for Lutherans now owns 104,861 shares of the company’s stock valued at $1,648,000 after purchasing an additional 1,007 shares during the period. Geneos Wealth Management Inc. purchased a new stake in RXO during the 1st quarter worth $30,000. Bank of Montreal Can increased its stake in RXO by 14.9% during the 4th quarter. Bank of Montreal Can now owns 12,332 shares of the company’s stock worth $156,000 after buying an additional 1,599 shares during the period. Larson Financial Group LLC lifted its holdings in RXO by 146.5% in the 3rd quarter. Larson Financial Group LLC now owns 2,766 shares of the company’s stock worth $43,000 after buying an additional 1,644 shares in the last quarter. Finally, Quarry LP acquired a new position in RXO in the 3rd quarter worth $33,000. 92.73% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

RXO has been the subject of a number of research reports. Morgan Stanley restated an “equal weight” rating and set a $22.00 target price (up from $19.00) on shares of RXO in a research report on Thursday, May 7th. Susquehanna increased their price target on shares of RXO from $18.00 to $20.00 and gave the company a “negative” rating in a research report on Tuesday, July 14th. William Blair set a $30.00 price objective on shares of RXO in a research note on Friday. Wall Street Zen upgraded RXO from a “sell” rating to a “hold” rating in a research report on Saturday, May 9th. Finally, Benchmark reaffirmed a “hold” rating on shares of RXO in a research note on Tuesday, July 28th. Five investment analysts have rated the stock with a Buy rating, ten have assigned a Hold rating and four have assigned a Sell rating to the company’s stock. According to data from MarketBeat, RXO has an average rating of “Hold” and an average price target of $23.85.

About RXO

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.