XPO beats estimates on Q4 earnings per share

XPO Logistics Inc. reported late Tuesday $1.34 cents in fourth-quarter adjusted diluted earnings per share, beating analysts’ median estimates by 35 cents.

On an adjusted basis and without the impact of dilution, XPO’s (NYSE: XPO) per-share earnings came in at $1.08 cents, which still topped the 99 cents per share that analysts polled by Barchart estimated.

The Greenwich, Connecticut-based company posted fourth-quarter operating income of $174 million, compared with $153 million in the year-earlier quarter. Adjusted earnings before interest, taxes, depreciation and amortization increased by $34 million to $323 million.

In its first full-year guidance as the reconstituted XPO after spinning off its logistics arm, GXO Logistics Inc. (NYSE: GXO), last August, XPO expects adjusted EBITDA to come in between $1.36 billion and $1.4 billion for 2022. It also guided for full-year adjusted diluted earnings per share to between $5 and $5.45 per share.

XPO’s North American LTL segment generated $137 million in fourth-quarter operating income, roughly flat from 2020 levels. Revenue rose to $1 billion from $916 million. Adjusted EBITDA rose $8 million to $210 million, though the 2021 results include a $35 million gain on the sale of real estate. 

The segment’s fourth-quarter adjusted operating ratio, excluding the real estate sale profit, was 87.5%, XPO said. Operating ratio is the measure of revenues over expenses, and is the key metric of LTL profitability. The North American LTL business, which accounts for two-thirds of the company’s profits, has been under scrutiny since it reported a worse-than-expected adjusted operating ratio of 84% in the third quarter. 

XPO still expects the segment to generate at least $1 billion of adjusted EBITDA in 2022, a pledge that XPO Chairman and CEO Brad Jacobs made several years ago.

In a statement accompanying the results, Jacobs said the segment’s operating ratio “bottomed out” in October after the company implemented a five-step action plan to improve network flow, pull forward a scheduled January 2022 general rate increase into November, and impose accessorial charges for detained trailers, oversized freight and special handling, among others. XPO expects the segment’s year-over-year adjusted operating ratio to show year-over-year improvement by mid-2022, Jacobs said.

XPO continues a search for a permanent head of its LTL business. Mario Harik, XPO’s longtime chief information officer, has been serving as interim head for months.

XPO’s truck brokerage segment posted a 36% fourth-quarter year-over-year gain in gross revenue to $846 million. Net revenue, defined as gross revenue minus the cost of transportation and services, rose 10% to $128 million. The combined brokerage, final-mile and intermodal businesses generated revenue of $2.41 billion, up about 6% year-over-year.

XPO’s share price has had a rough ride since the company began trading on Aug. 2 without its logistics operations. Shares that traded at around $90 at the time closed Tuesday at $64.34 a share. Shares moved fractionally higher in after-hours trading.

were trading at just under $64 just before Tuesday’s market close. Shares of XPO and GXO fell sharply in early December after a government filing revealed that Jacobs had executed sales of 3.2 million shares in each. The sales, which the company said were triggered under a previously executed plan put in place after the GXO spinoff, equaled a 20% share held by Jacobs in each company.

Jacobs, who also serves as GXO’s chairman, still owns about 12.3 million shares in each.

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes XPO (No. 8).

Source: https://www.freightwaves.com/news
Editor: Mark Solomon