XPO Reports Record $3.47 Billion in Revenue for Q1
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XPO Logistics Inc. reported the highest revenue of any quarter in its history May 9 for the first quarter of 2022.
The Greenwich, Conn.-based freight transportation firm posted net income of $488 million, or $4.22 a diluted share, for the three months ending March 31. That compared with $118 million, $1.02 a share, during the same time the previous year. The total revenue increased by 16% to $3.47 billion from $2.99 billion.
Net income from continuing operations attributable to common shareholders was a first-quarter record. It increased 676% to $489 million from $63 million during the same time the prior year. The adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) also broke a first-quarter record for the company, increasing 15% to $321 million from $279 million.
Wilkerson by XPO Logistics
The company’s North American less-than-truckload segment generated revenue for Q1 that increased 14.9% to $1.1 billion from $962 million during the same time last year. The year-over-year increase in revenue primarily reflects an increase in yields. Operating income for the segment decreased 9% to $132 million from $145 million last year.
The brokerage and other services segment reported that revenue increased 17.4% to $2.43 billion from $2.07 billion for the same period last year. Volume growth in truck brokerage and strong pricing in other brokerage services were partially offset by higher segment costs for third-party transportation and compensation. Operating income for the segment increased 56.3% to $100 million from $64 million last year.
“We’re executing on multiple avenues to create outsized shareholder value,” XPO CEO Brad Jacobs said in a May 10 conference call. “In LTL we’re ahead of plan and we have enormous momentum. You look at April, the growth in revenue per day exceeds the first-quarter growth.”
Jacobs added, “In truck brokerage we continue to perform at best-in-class level. In the first quarter, we grew loads on a year-over-year basis at 23%. April was our best month ever for margin dollars in truck brokerage. And we expect to continue to significantly outperform the market.”
XPO also announced that Drew Wilkerson, currently its president of North American Transportation, will become CEO of the planned spinoff of its tech-enabled brokered services platform. Wilkerson will transition to the CEO role with the spinoff, which the company expects to complete in the fourth quarter of this year.
“On the spin we’re progressing nicely,” Jacobs said. “We expect to turn one great company into two great companies in the fourth quarter.”
The XPO Connect digital platform also helped drive the Q1 increase in truck brokerage loads. The platform finds carriers to haul loads. It uses technology to provide real-time visibility into freight status, delivery tracking and prices.
Truck brokerage revenue in North America increased 38% to $824 million from $596 million last year. The increase in revenue was primarily driven by a 23% increase in loads in the quarter. Margin increased 21% to $134 million from $111 million.
XPO at the end of the quarter had $2 billion of total liquidity, including $1 billion of cash and cash equivalents and approximately $1 billion of available borrowing capacity.
The company’s overall Q1 results surpassed expectations by investment analysts on Wall Street, who had been looking for 94 cents per share and quarterly revenue of $3.22 billion, according to Zacks Consensus Estimate.
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“XPO reported 1Q results well above our forecast and consensus expectations as broad strength continued in Q1,” Cowen and Co. analyst Jason Seidl wrote in an initial response to the earnings report. “XPO continues to reduce its leverage at a rapid pace, faster than we modeled.”
XPO during the quarter also sold its North American intermodal operation for cash proceeds of approximately $710 million. This deal is still subject to a customary post-closing purchase price adjustment. This was part of its previously announced 2022 strategic plan.