The U.S. has been in “an industrial recession for over a year now,” according to Bradley Jacobs, CEO of XPO Logistics, one of the largest global transportation and warehouse companies in the world.
Industrial output has fallen, “that’s a direct result of the tariffs,” Jacobs told CNBC in an interview Monday as the company released its third-quarter earnings.
The company’s revenue for the third quarter dipped by more than 4% to $4.15 billion during the three months ended Sept. 30, from $4.34 billion during the same period last year. It missed analysts estimates of $4.27 billion.
Its profit was better than expected. On an adjusted basis, the company earned $1.18 a share, compared with $1.04 a share forecast by Wall Street analysts, according to data compiled by Refinitiv.
On an unadjusted basis, XPO’s profit rose by 15.8% to $117 million, or $1.14 a share, up from $101 million, or 74 cents a share during the same three months last year.
“All the wins that we have gotten they are driven by technology innovations,” Jacobs said, explaining how the company wrung out more profit.
The company, however, lowered its revenue guidance for the fourth quarter. It now expects revenue to fall somewhere between 2.5% and 4% for the last three months of the year. Its previous revenue forecast for the fourth quarter ranged from a decline of 1% to an increase of 1%.
Jacobs cited continued pressure on trucking rates for its freight brokerage business and unfavorable currency exchange for the drop in revenue.
The company’s earnings presentation said it has “paused” mergers and acquisitions while completing a $2.5 billion stock buyback program it started in late 2018.
XPO appointed former General Electric Chief Investment Officer Aris Kekedjian to its board as an independent director earlier this month. Kekedjian is a known deal maker and credited for playing a key role in the $30 billion merger between GE Oil & Gas and Baker Hughes.
“We are in the early stages of M&A dating, ” Jacobs said.
XPO’s third quarter earnings call is scheduled for 8:30 a.m. ET.
