Greenwich, Connecticut, USA: XPO Logistics has reported record sales and earnings in its third quarter, beating Wall Street predictions.
XPO reported $307m in Ebitda from $3.3bn in sales. Wall Street was looking for $298m in Ebitda from $3.1bn in sales.
Sales were a quarterly record and Ebitda was a record for a third quarter when adjusted for the spinoff of GXO Logistics completed in August.
XPO expects to generate about $303m in Ebitda in the fourth quarter. Wall Street is projecting $298m in Ebitda, flat with its third-quarter projection.
“In North American truck brokerage, every major metric was up year-over-year by large double digits,” Brad Jacobs, chief executive, said in the company’s news release.
The number of truckloads handled by XPO’s brokerage business increased 37% year over year, while gross profit from truck brokerage increased more than 60%, outpacing load growth.
“Memories of this moment [in shipping] are going to be long,” Matthew Fassler, chief strategy Officer, said. The current difficulties in shipping parts and goods will cause companies to reassess and invest in their supply chains for a long time, he said.
There still are concerns. Fassler called the persistence of tight labor markets a surprise. That is something for investors to watch. Profit margins in the company’s less-than-truckload business fell year over year, partly because wage growth outpaced sales gains.
In addition to its financial results, XPO laid out a number of recent strategic initiatives, including making a price increase that was scheduled for January 2022 effective this month, expanding company-owned truck trailer production, and investing more capital into its LTL business.
The company also said it reduced debt by about $1.5bn in the quarter, saving some $100m in annual interest costs.
