XPO reports strong Q1 earnings

First quarter revenue was up 18.4% annually to $4.19 billion, and quarterly net income came in at $66.9 million, or $0.50 per share, which was ahead of net income of $19.5 million, or $0.16 per share a year ago and also ahead of Wall Street expectations by 7%.

By ·

, a Greenwich, Conn.-based global provider of freight transportation and logistics services, announced late yesterday that its first quarter earnings and operating results were very strong to start 2018.

First quarter revenue was up 18.4% annually to $4.19 billion, and quarterly net income came in at $66.9 million, or $0.50 per share, which was ahead of net income of $19.5 million, or $0.16 per share a year ago and also ahead of Wall Street expectations by 7%. EBITDA rose to $330.2 million, minus $7.2 million in integration and rebranding costs, which tops $290 million of adjusted EBITDA a year ago and is a new first quarter record for XPO.

XPO again saw strong results for its revenues in its business segments, including:

  • Transportation total revenue up 16% annually at $2.77 billion, with XPO noting growth was paced by increases in North American Freight Brokerage and last mile, along with dedicated truckload transportation in Europe, and favorable foreign exchange rates. Quarterly operating income, at $139 million, was up 24.4% annually. And North American less-than-truckload (LTL) net revenue rose 4.5% to $920 million, with the operating ratio for the segment at 87.8%, for an improvement of 120 basis points; and
  • Logistics total gross revenue increased 23.2% to $1.45 billion, with growth being paced by strong global demand for e-commerce contract logistics and industrial sector gains in North America and the European fashion sector, in addition to favorable foreign exchange rates. Logistics operating income was up 30.1% to $47.5 million

XPO’s companywide sales pipeline currently stands at a new record $3.66 billion, which XPO Chairman and CEO  told LM is 23% higher than a year ago, coupled with the company signing new business of $972 million, which represents a 36% increase and is also a new quarterly record.

“We are doing great in freight brokerage in a tight market, growing revenues by 30% [to $710.2 million] while increasing our growth margin 130 basis points, with organic logistics revenue by 14%, up from 8% last year, and hit an all-time high of $1.9 billion in our logistics pipeline, up 90% from $1 billion a year ago,” he said.

Jacobs added that XPO opened up 20 new contract facilities over the first quarter, averaging opening two per week on average. And he also noted that XPO’s reverse logistics business is “booming,” with the company now managing more than 170 million returns annually and generating revenue approaching $500 million in reverse logistics.

Addressing the company’s Last Mile performance, Jacobs said it was another strong quarter, with revenue increasing by 15% to $238.4 million and driven largely by growth from XPO’s e-commerce customers.

“We won more last mile business in the quarter than in any other first quarter in XPO’s history,” said Jacobs. We are seeing strong demand for our last mile offerings in Europe, and we are now up and running in the UK, Ireland, Spain, France, and The Netherlands.”

Shifting to LTL, Jacobs said XPO had another good quarter, with the 87.8 operating ratio being its best one for the first quarter in the last 18 years, dating back to when XPO LTL was still part of Con-way.

“This is an acceleration of 60 basis points [in OR] from the fourth quarter, with our full-year OR on track to improve by 100-to-200 basis points better than 2017,” he said.

Overall, Jacobs said XPO is off to a strong start and remains on track to deliver at least $1.6 billion in EBITDA and $1 billion of free cash flow for 2017 and 2018.

With the Electronic Logging Device (ELD) mandate in full effect for United States motor carriers and capacity extremely tight, Jacobs said that resulted in a good first quarter for XPO’s spot business.

“Our freight brokerage business is now about two-thirds spot and one-third contractual, which is the opposite of where it was last year,” said Jacobs. “In April, the truckload brokerage market remained tight. ELDs had an impact early in the year, and we expect that to continue to impact the market. We did not see much change in April with the new enforcement rules. We think transportation, generally, in North America and Europe, will remain constrained over the balance of 2018. And we are seeing GDPs between 1%-to-3.5% generally in the economies we are operating in, with steady business and demand. But at the same time we don’t see capacity expanding, it is staying tight.”

On the LTL side, Jacobs said XPO is the market leader in 1-day and 2-day shipments on the premium side, with XPO positioned at the number two LTL carrier in the market behind only FedEx Freight.

LTL revenue per shipment in the first quarter was up to $291.84 from $263.47 in the first quarter, with gross revenue per hundredweight, including fuel surcharges, up to $20.08 from $18.92 a year ago.

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.

Latest Whitepaper
Making the Case for Using a Transportation Management System for Parcel Shipping
We discuss the key pain points that all parcel shippers are dealing with right now and show how a multi-carrier transportation management system can help reduce costs, improve efficiencies, and improve the organizational bottom line.
Download Today!
From the June 2019 Logistics Management Magazine
Over the years, we’ve tried to steer clear of too many themed issues because we’re proud to offer our readers a wide breadth of industry information. The logistics and transportation market is so diverse, and shippers are looking to solve a multitude of challenges across a number of modes and services areas—never just one.

Warehouse Execution Systems (WES) Evolves Beyond “inside the four walls”
Got labor? How supply chain companies are recruiting talent during a labor crunch
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly newsletter!
Latest Webcast
How to Solve The Unique Challenges of Multi-Carrier Parcel Shipping
Join Logistyx President Ken Fleming for an appraisal of multicarrier shipping, TMS solutions and the nuances of interpreting Gartner’s Magic Quadrant for TMS, without a barcode label in sight! Using case studies, review scenarios traditional TMS solutions struggle to manage, such as high volume and international shipping, and learn why parcel shipping requires a different solution and how to design your process and architecture to leverage both effectively.
Register Today!
Got labor? How supply chain companies are recruiting talent during a labor crunch
How are companies faring in the race to recruit and train high-level supply chain talent in a market...
35th Annual Salary Survey: Compensation matters more than ever
While job satisfaction remains the primary reason for today’s logistics managers to stay with one...

2019 Rate Outlook: Pressure Builds
In 2019, the world economy will enter a third straight year of broad-based growth, but many...
2019 Transportation Management Systems (TMS) Market Update: Keeping pace with the times
The transportation management systems market is growing right along with the number of challenges...


Acheter Kamagra