GREENWICH, Conn. – XPO Logistics’ stock got an immediate 6% boost when the company beat third-quarter revenue expectations.
The global logistical services provider reported $4.22 billion in revenue for the three months ended Sept. 30, up 7% from third-quarter 2019 levels. Net income attributable to common shareholders was $84 million, compared with $117 million for the same period last year.
XPO’s transportation segment generated third-quarter revenue of $2.68 billion, flat compared with third quarter 2019. Operating income for the segment was off 2.9% at $202 million compared with the same period last year. Segment operating income for the third-quarter 2020 included a $6 million impact from COVID-19-related costs, including $4 million in less-than-truckload.
North American less-than-truckload yield excluding fuel increased by 1.7% year-over-year for the third quarter 2020, and the LTL third-quarter operating ratio of 81.7% was a quarterly record.
XPO’s logistics segment generated third-quarter 2020 revenue of $1.58 billion, up 4.6% from the same period last year. Segment revenue growth was led by strong demand from e-commerce and other consumer-related verticals, partially offset by COVID-19 impacts in other areas and the company’s exit from certain low-margin business.
The company reported a 26.2% jump in logistics segment operating income to $77 million compared with the year-ago period. XPO attributed the increase primarily to the increase in segment revenue, partially offset by higher labor and facility costs. Segment operating income for this year’s third quarter included a $3 million impact from COVID-19-related costs.
Brad Jacobs, chairman and CEO, said in a release that revenue, adjusted EBITDA, adjusted earnings per share and free cash flow were all decisively higher than expected for the third quarter.
“Supply chain outsourcing is accelerating, and e-commerce continues to be a huge tailwind for us, particularly in contract logistics and last mile,” Jacobs said. “We grew our last mile revenue by 11% in the quarter, year-over-year, by leveraging our North American hubs and XPO Direct network.
“In truck brokerage, we realized revenue growth of 27%, with a 13% increase in net revenue per load. Our XPO Connect technology is a major driver of these results: All of our non-asset transportation services now use this powerful platform to manage their freight movements.”
Through 2020’s first nine months, XPO revenue of $11.6 billion was down 7.4% from the $12.5 billion reported after last year’s first three quarters. XPO lost $15 million through this year’s third quarter compared with net income of $312 million at the same point last year.
Click here for the full XPO third-quarter release.