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August 2, 2019 11:45 AM, EDT

XPO Reports Mixed 2Q Financials

XPO Logistics trailer XPO Logistics' net income for the first six months of 2019 was $197 million, compared with $238 million last year. (XPO Logistics)

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Global freight transportation and logistics provider XPO Logistics reported mixed financial results for the second quarter Aug. 1.

The Greenwich, Conn., company’s net income dropped to $145 million from $159 million a year ago, but its earnings per share were up sharply, to $1.32 compared with $1.14 in the 2018 period.

Net income for the first six months of 2019 was $197 million, compared with $238 million last year. The six-month price per share was $1.66, compared with $1.70 in 2018.

Revenue was $4.23 billion, compared with $4.36 billion during the same period a year ago. At the halfway point of 2019, XPO reported revenue of nearly $8.36 billion, compared with $8.55 billion last year.

Operating ratio improved to 80.3% from 84.3% a year ago. Operating ratio, or operating expenses as a percentage of revenue, is an industry metric used to measure efficiency. The lower the ratio, the greater the company’s ability to generate profit.

XPO Logistics CEO Bradley Jacobs

Jacobs

Despite the lower revenue and net income figures, company officials are confident their turnaround plan is taking hold.

“We’re implementing innovations in North American LTL to drive the next leg of profit improvement. Our workforce productivity tools are returning positive results in 18 pilot service centers ahead of the national rollout to all 290 LTL centers this year,” CEO Bradley Jacobs said. “In addition, we’re developing an entire suite of proprietary tools that utilize machine learning for dynamic pricing, route optimization of pickup and delivery, linehaul efficiency and yard management.”

XPO’s transportation division generated $2.75 billion in revenue for the second quarter 2019, compared with $2.89 billion for the 2018 period. XPO said the decline reflects a reduction in freight brokerage and direct postal injection business from the company’s largest customer, unfavorable foreign currency exchange and lower truckload rates in freight brokerage.

In the second quarter, XPO’s logistics division generated revenue of $1.53 billion, a 1.2% increase from the same period in 2018. Organic revenue growth was 4.8%. Segment revenue growth was led by food and beverage, consumer packaged goods, aerospace and health care in North America and by e-commerce in Europe.

XPO ranks No. 1 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 top for-hire carriers.