The Charlotte-based brokerage firm saw its stock drop 7.7% to $15.30 following an earnings report that missed Wall Street estimates on both the top and bottom lines. RXO posted a net loss of $46 million, or 27 cents per share, nearly doubling the $25 million loss recorded during the same period last year. On an adjusted basis, the loss of 7 cents per share was deeper than the 4-cent loss analysts had anticipated.

Revenue for the fourth-quarter fell to $1.47 billion, down from $1.67 billion a year earlier and falling short of the $1.49 billion consensus. The company's core brokerage business felt the brunt of the downturn, with gross margins tightening to 11.9% as volumes slipped 4% year-over-year. CEO Drew Wilkerson attributed the squeeze to a rapid acceleration of freight market tightening, primarily driven by persistent reductions in available truckload capacity.

Outlook and Segment Performance

Despite the quarterly setback, Wilkerson noted that the company maintains "significant sales momentum" even as demand remains fragile. However, the immediate outlook remains cautious as the industry grapples with a prolonged cyclical downturn. For the current quarter, RXO expects brokerage volumes to decline between 5% and 10%, with gross margins projected to hover between 11% and 13%.

The company's financial targets for the upcoming quarter include:

• Adjusted EBITDA between $5 million and $12 million.
• Brokerage gross margins of 11% to 13%.
• A projected volume decline of up to 10% in the brokerage segment.

While the transportation sector continues to face headwinds, RXO remains focused on capturing market share. The stock has now lost 23% of its value over the past year, reflecting broader investor anxiety over the timing of a recovery in the freight cycle.