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GXO Logistics Inc. reported revenue growth and a decline in earnings in its third-quarter report released Nov. 8.
The Greenwich, Conn.-based global contract logistics company posted net income of $64 million, or 53 cents a diluted share, for the three months ending Sept. 30. That compared with $73 million, 62 cents, during the year-ago period. Total revenue increased by 16% to $2.29 billion from $1.97 billion.
“In the third quarter, we once again posted strong operating and financial results and were pleased to deliver our highest ever quarterly revenue, together with net income of $63 million and 19% year-over-year growth in our adjusted EBITDA,” CEO Malcolm Wilson said.
The omnichannel retail vertical contributed the most to revenue having increased 19.5% to $919 million from $769 million during the 2021 period. The was followed by technology and consumer electronics, which increased 25% to $338 million from $270 million. Food and beverage came next, having decreased 7.2% to $335 million from $361 million last year.
“We continued to gain market share across verticals and geographies, with particular strength in consumer packaged goods, technology and industrials, as demand continues to grow from both existing and new customers looking to improve productivity and reduce costs,” Wilson said. “With receipt of final regulatory approval from the U.K.’s Competition and Markets Authority for our acquisition of Clipper Logistics, integration is underway, and we anticipate realizing the lion’s share of the planned cost synergies in 2023 and 2024.”
GXO noted in the report that it won new customer contracts expected to contribute $158 million in annualized revenue during Q3. The new contracts also are expected to contribute $497 million in incremental revenue next year.
“Looking beyond peak, we are confident for 2023 and expect to deliver notable growth,” Wilson said. “Our global pipeline is strong, our conversion rates remain high, and demand for the types of technology we provide is only accelerating. Based on our wins to date, we’ve already secured nearly half of a billion dollars of incremental revenue for next year, further strengthening our visibility for 2023.”
U.K.-based operations contributed the most to revenue having increased 30% to $890 million from $680 million last year. That was followed by the United States, with its revenue contributions increasing 18% to $709 million from $599 million.
“Amidst a dynamic macroeconomic environment, there are significant benefits to being a pure-play contract logistics provider, with long-term, contractual relationships that include inflation pass-throughs and minimum volume guarantees,” Wilson said. “We are excited to present our long-term vision to drive superior returns for our shareholders at our Investor Day.”
GXO Logistics ranks No. 8 on the Transport Topics Top 100 list of the largest logistics companies in North America.
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