XPO’s Mario Harik Touts Strong Q4, Full-Year Performance

XPO Logistics building
"We grew volume, we grew pricing, we grew margins and earnings in a challenging macro,” says CEO Mario Harik. (XPO Inc.)

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XPO Inc. CEO Mario Harik on Feb. 8 discussed how his company reached over a billion dollars in revenue during the fourth quarter despite a business spinoff and softening freight market.

The Greenwich, Conn.-based less-than-truckload carrier posted a net loss of $94 million, or a loss of 81 cents a diluted share, for the three months ending Dec. 31. That compared with a gain of $122 million, $1.05, during the same time the previous year. Total revenue increased 3.3% to $1.83 billion from $1.77 billion.

“We had a very strong Q4 and full-year 2022,” Harik told Transport Topics. “We reported solid revenue growth and a strong year-over-year increase in profitability and free cash flow. We grew volume, we grew pricing, we grew margins and earnings in a challenging macro.”

Harik pointed out that the net income loss primarily was due to one-time costs associated with the spinoff of RXO. The technology-focused truckload freight brokerage business became a stand-alone company Nov. 1. The earnings report included adjusted measures that normalize for the spinoff. Adjusted net income from continuing operations attributable to common shareholders increased 53% to $113 million from $74 million from the 2021 period. Adjusted diluted earnings from continuing operations per share increased to 98 cents from 64 cents.

Mario Harik


“Another thing that I’m very proud of is the fact that we grew tonnage in a macroenvironment where the entire industry’s tonnage was down,” Harik said. “So, when you look at the LTL industry, there was softer freight demand given the softer macro, and we were able to grow tonnage and gain market share in that environment.”

Harik attributed the company growth amid a softening freight environment to expanding capacity, service improvements and technology investments. That includes the company building its own trailers, growing its workforce and adding six new terminals over the last year. XPO expanded its linehaul fleet by more than 10% through the course of 2022.

“These investments in capacity enabled us to capture more demand from our customers,” Harik said. “The second area we focused on was significant improvements in the quality of our service, and our service quality in the fourth quarter was the best it’s been in six years and our customers are rewarding us. They’re giving us more business for the ones who are existing customers, and we are able to onboard a lot of new customers as well to our network.”

For the full year, XPO reported net income of $666 million, or $5.76 a share, on revenue of $7.72 billion, compared with net income of $341 million, or $2.93 a share, on revenue of $7.2 billion in 2021.

“2022 has been a great year in every metric in terms of revenue growth, earnings growth, profits growth and free cash flow growth as well,” Harik said. “So, it’s been a very solid year. Some of the things, obviously, we’re very proud of, we did improve margins across our LTL business for the full year.”

Earnings before interest, taxes, depreciation and amortization (EBITDA) was another focus. That measure grew on an adjusted basis 38% in the quarter to $262 million from $190 million for the same period in 2021.

“We delivered more than a billion dollars of EBITDA in our LTL business,” Harik said. “So, it’s been a great freight year, and we’re looking forward to positioning ourselves post-RXO spin, now with a stand-alone LTL company here in North America with a ton of momentum. We are incredibly excited about the investments we’re making, the progress we’re making in service.”

North American less-than-truckload revenue in Q4 increased 7.9% to $1.09 billion from $1.01 billion for the same period in 2021. This was driven by a strategic change in channel mix and an increase in tonnage that helped yields improve 1.4% year-over-year. Operating income for the segment increased 25.5% to $172 million from $137 million.

European transportation revenue decreased 3.6% to $738 million from $766 million during the prior-year period. The decrease was due to unfavorable foreign currency exchange. The segment also saw an operating loss of $60 million, compared with an operating loss of $3 million for the same period in 2021. That included a $64 million noncash goodwill impairment charge related to a change in segment structure after the RXO spinoff.

XPO Inc. ranks No. 6 on the Transport Topics Top 100 list of the largest logistics companies in North America and No. 3 on the TT Top 100 list of the largest for-hire carriers.

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