Less-than-truckload carrier XPO rode higher volumes and higher pricing to a third-quarter beat on Monday.
XPO (NYSE: XPO) reported adjusted earnings per share of 88 cents before the market opened. The result was 25 cents higher than the consensus estimate but 7 cents lower 12 months over 12 months (y/y). The adjusted number excluded transaction and restructuring costs.
“Our third quarter results exceeded expectations, with solid growth in revenue and profitability, and powerful forward momentum,” said CEO Mario Harik.
Revenue in the corporate’s LTL unit increased 2% y/y to $1.23 billion. Tonnage per day was 3% higher and revenue per hundredweight, or yield, increased 6% excluding fuel surcharges.
In comparison with the second quarter, XPO’s shipments per day increased 5%, partly attributable to Yellow’s exit. Yield (excluding fuel surcharges) was also up 6% from the second quarter. The segment recorded an 86.2% adjusted operating ratio, which was 140 basis points higher sequentially.
The OR normally deteriorates by 230 bps from the second to 3rd quarter. The corporate outperformed the mark by 370 bps.
“It’s exciting to take large steps forward across the business as we execute our plan. We’re making excellent progress, and I’m confident that we’re still within the early innings of realizing XPO’s full potential,” Harik continued.
XPO’s European transportation segment recorded a 2% y/y revenue increase to $752 million and a 5.8% adjusted EBITDA margin, which was down 10 bps y/y.
XPO will host a call at 8:30 a.m. EDT Monday to debate third-quarter results.
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