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February 9, 2022 1:34 PM, EST

XPO Ends Eventful Year With Record $3.36 Billion Revenue

XPO Logistics trailersFor the full year, XPO Logistics reported earnings from continuing operations of $323 million on revenue of $12.8 billion. (XPO Logistics)

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XPO Logistics Inc. achieved its highest quarterly revenue ever during the fourth quarter of 2021, the company reported Feb. 8.

The Greenwich, Conn.-based freight transportation firm reported net income attributable to common shareholders of $122 million, or $1.05 a diluted share, for the three months ending Dec. 31. That compared with $93 million, or 91 cents, during the same time the previous year. Total revenue increased by 14.4% to a record $3.36 billion from $2.94 billion.

XPO included in the report information on operations that still were part of the company by the end of the quarter. Net income from continuing operations attributable to common shareholders surged 270.6% to $126 million from $34 million the prior year. Diluted earnings per share from continuing operations increased to $1.08 a share from 33 cents.

 

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The results surpassed expectations by investment analysts on Wall Street, who had been looking for 99 cents per share and quarterly revenue of $3.27 billion, according to Zacks Consensus Estimate.

“We reported a fourth quarter that delivered a number of record results,” Chairman and CEO Brad Jacobs said during a conference call with investors Feb. 9. “The company as a whole performed well. We grew revenue by 14% year-over-year to $3.4 billion, which was the highest revenue of any quarter in our history.”

Jacobs added the company also reported its highest adjusted diluted earnings per share of any quarter. This growth, he noted, was driven by the performance of the North American less-than-truckload and brokerage segments.

“Our adjusted operating ratio in the quarter degraded year-over-year, which was expected given some third-quarter challenges within our network,” Jacobs said. “But the negative trend bottomed out in October when we launched our LTL action plan.”

We grew revenue by 14% year-over-year to $3.4 billion, which was the highest revenue of any quarter in our history.

XPO Logistics Chairman and CEO Brad Jacobs

Brad Jacobs

The report included an update to its previously announced plan to enhance North American LTL network efficiencies and growth. The plan seeks to improve network flow, drive pricing, expand the driver base, increase trailer production and expand by 900 new doors.

“Our plan had an immediate impact on our year-over-year performance,” Jacobs said. “We reduced the erosion in our operating ratio and improved our volume trend as the quarter progressed. We expect year-over-year adjusted operating ratio, ex real estate, to inflect positive midyear and generate over a hundred basis points of improvement in 2022.”

For the full year, XPO reported net income from continuing operations of $323 million, or $2.82 a share, on revenue of $12.8 billion, compared with net loss of $41 million, negative 45 cents, on revenue of $10.2 billion in 2020.

XPO Q4 2021 Earnings by Transport Topics on Scribd

The North American less-than-truckload segment reported revenue for Q4 increased 9.2% to $1 billion from $916 million during the same period in 2020. The gains reflected an increase in gross revenue per hundredweight that partially was offset by a decline in average weight per day. Operating income for the segment decreased 0.7% to $137 million from $138 million.

Revenue in the brokerage and other services segment increased 17% to $2.41 billion from $2.06 billion the prior year. The results reflected an increase in North American truck brokerage loads per day. The XPO Connect digital platform helped to facilitate the rise in truck brokerage loads alongside strength in other brokerage services. Operating income for the segment increased 47.6% to $93 million from $63 million.

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“In truck brokerage, we had another quarter of outstanding growth with load count increasing to record levels for the third consecutive quarter,” Jacobs said. “The biggest tailwind driving our volume is XPO Connect, our digital brokerage platform. Shipper and carrier adoption of Connect is growing extremely fast.”

XPO Connect helps shippers find carriers to haul loads. It uses technology to provide real-time visibility into freight status, delivery tracking and prices. Jacobs noted the mobile app exceeded 600,000 cumulative driver downloads in December. Weekly carrier usage of the platform in the quarter was up year-over-year by 74%.

“XPO reported a 4Q that came in above expectations, and offering a first look into 2022 with outlook coming in well above our estimate and the consensus forecast,” Cowen Co. analyst Jason Seidl wrote in the company’s response, which will be updated. “While its NA LTL business saw sequential degradation, XPO expects its OR to hit an inflection point midyear and called for over 100bps of OR improvement y/y in 2022.”

XPO Logistics ranks No. 2 on the Transport Topics Top 50 list of the largest logistics companies in North America and No. 3 on the TT Top 100 list of the largest for-hire carriers.