XPO Logistics announced increased revenue and profits in the third quarter and, although the gains were less than what some investment analysts had expected, CEO Bradley Jacobs said the company implemented a record number of new logistics contracts in the quarter, which bodes well for future growth.
“We closed $918 million of new business in the quarter, up 43% from last year, due in large part to our expanded sales organization and proprietary technology,” Jacobs said in a statement Oct. 31. “Our leading positions in sectors such as e-commerce, as well as our capacity for innovation, should keep us growing faster than the industry in any macroenvironment.”
In addition to reporting earnings, the Greenwich, Conn.-based XPO announced the appointment of Matthew Fassler as chief strategy officer. Fassler comes from Goldman Sachs, where he headed up investment research for the U.S. consumer sector. He will succeed Scott Malat, who served as CSO since 2011 and will step down Dec. 8 to spend more time with his family.
Jacobs said Fassler is an expert on market dynamics in the bricks-and-mortar retail and e-commerce sector, which is the fastest-growing part of XPO’s business.
“Matt’s insights will help us execute on our strongest opportunities for expansion,” Jacobs said.
XPO Logistics ranks No. 1 on the Transport Topics Top 50 list of largest logistics companies in North America and No. 3 on the Transport Topics Top 100 list of largest for-hire carriers in North America.
In reporting its financial results, XPO said net income attributable to common shareholders was $100.8 million, or 74 cents a share, in the three months ended Sept. 30, compared with $57.5 million, or 44 cents a share, in the same period a year ago. Earnings were reduced by $15.6 million, or $11.4 million after tax, because of a customer bankruptcy during the quarter, the company reported.
Total revenue from trucking and logistics operations increased 11.5% to $4.34 billion in the third quarter of 2018 from $3.89 billion in 2017.
Looking ahead, XPO trimmed its forecast for earnings before interest, taxes and depreciation allowance for the full year to $1.58 billion from $1.6 billion, in part, because of the customer bankruptcy.
In North America, XPO reported revenue gains in three of four business segments.
Gross revenue from non-asset-based freight brokerage services was $739.1 million in the third quarter of 2018 versus $628.6 million in 2017. Net revenue, which is total revenue minus the cost of purchased transportation, was $392.7 million compared with $368.3 million.
Revenue from the company’s asset-based less-than-truckload business was $981.7 million compared with $928.5 million.
Last-mile revenue increased to $271 million from $242.1 million, and revenue from managed transportation services was $110.1 million compared with $118.1 million.
In Europe, XPO reported revenue from freight brokerage and truckload services of $456.9 million in the third quarter of 2018 compared with $409.3 million in 2017. Less-than-truckload revenue was $246.2 million versus $220.5 million.
Revenue from XPO’s logistics operations, which include warehousing and distribution services, was $1.52 billion in the most recent quarter, a 13.1% increase from $1.34 billion in 2017.
The growth in logistics revenue reflected increased demand for order fulfillment services for goods purchased online, plus growth in consumer packaged goods and beverage sectors in North America and in the fashion sector in Europe, XPO reported.
XPO operates in 32 countries with 1,529 locations and more than 98,000 employees.