XPO Logistics posted record-breaking fourth quarter earnings results this week, revealing quarterly revenue hitting $3.4 billion.
This was the fourth straight quarter the company’s revenue has set a new record. Q4 saw an increase of 14% annually and was up 30% compared to 2010. The revenue also topped Wall Street’s expectations of $3.269 billion.
Adjusted earnings per share was also at a record at $1.34, while adjusted EBITDA at $323 million, was the highest fourth quarter level in company history. It was a 15% annual gain and beat analyst’s expectations of $302 million. It was the sixth quarter in a row of a quarterly EBITDA record.
Full-year 2022 EBITDA guidance issued by XPO now stands at $1.36 billion-to-$1.4 billion.
“Our company delivered a strong fourth quarter finish to a year of solid growth,” said XPO Logistics Chairman and CEO Brad Jacobs in a statement.
“We reported the highest revenue of any quarter in our history, and generated adjusted EBITDA that exceeded our guidance for both the quarter and the year. In North American LTL, the operating ratio degradation we saw last quarter bottomed out in October with the launch of our action plan. This created immediate momentum—we reduced the year-over-year operating ratio erosion throughout the quarter and significantly improved our service metrics. We also grew yield by a record 11% ex fuel, and yield remained strong in January. Given our traction with LTL volume and yield, we expect our 2022 adjusted operating ratio to inflect to year-over-year improvement mid-year.”
Jacobs added that XPO’s North American truck brokerage business is well ahead of industry growth levels, due to the aforementioned XPO Connect digital brokerage platform.
“This technology was a major tailwind behind the 29% load growth we achieved in 2021 year-over-year, including 35% load growth from our top 20 customers,” he said. “In the fourth quarter, 70% of our brokerage orders were created or covered digitally. We expect to continue to deliver double-digit volume growth in North American truck brokerage in 2022 and going forward.”
When asked about the impact of inflation as it related to XPO’s customers, Chief Investor Relations Officer Tavio Headley described it as significant, not just in the U.S. but also in Europe.
“As a result of that, our customers are coming to us and asking for help, because we have access to these digital tools…both on the truckload brokerage side and on the LTL side as well,” he said. “For LTL, with customers coming to us, we moved 18 billion tons of freight for more than 25,000 LTL customers. By being able to do that digitally and much faster, that is helping them offset pressure in their organizations. Inflation can actually be a positive for companies that are in industries that have that pricing power. What we are seeing across our business lines and geographies we are in is that, in our business, we are seeing extremely strong pricing.”
Following the separation of its warehousing and logistics operations with the spin of GXO Logistics, XPO Logistics is now a purely transportation-oriented company.
Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.