XPO Logistics Inc. today reported its first profitable quarter in at least four years as the company gained new customers and moved forward with integrating more than a dozen acquisitions.
The company, which has rolled up businesses from different corners of the logistics industry including multi-billion dollar acquisitions of transportation providers in the U.S. and Europe, posted a record $42.6 million profit for the second quarter, or 35 cents per diluted share.
Wall Street analysts had expected 3 cents a share in profit, according to FactSet. XPO reported a $75.1 million loss a year earlier.
The company also reported a record $170 million of free cash flow on and adjusted its target for free cash flow in the next quarter to $150 million from a range of $100 million to $150 million. Revenue for the quarter was $2.4 billion.
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “In the second quarter, we generated $355 million of adjusted EBITDA, $261 million of cash flow from operations, and $170 million of free cash flow - all records for our company. We’re at an inflection point in the evolution of our business, accelerating our EBITDA and cash generation while continuing to invest in technology, our sales force and other levers of future growth.”
“Our strong performance in the quarter was led by our North American operations for last mile and less-than-truckload, and by our European supply chain operations. While market conditions were sluggish overall, e-commerce was a major tailwind - driving margin expansion in last mile, and resulting in major contract wins in contract logistics on both sides of the Atlantic. In LTL, we increased operating income by 66% from last year’s second quarter, pre-acquisition.”
Related: XPO Logistics ranks No. 5 on the 2015 Top 50 U.S. Domestic 3PLs
Jacobs continued, “We’ve raised our 2016 target for adjusted EBITDA to at least $1.265 billion, up from $1.25 billion. We also raised our free cash flow target to at least $150 million, up from a range of $100 million to $150 million. From here, we have a well-defined path to our target of $1.7 billion of EBITDA for 2018. More than $300 million of our profit improvement opportunities are company-specific and independent of macro conditions, including the global optimization of our network and the rationalization of $14 billion of addressable spend.”
Second Quarter 2016 Results by Segment
Launches Next Generation Website
The company announced the next generation of its website at www.xpo.com and its new tagline Results Matter. The site’s enhanced functionality connects customers with transportation and logistics experts and provides more information about ways in which XPO helps customers manage their goods more efficiently throughout their supply chains.
Conference Call
The company will hold a conference call today, August 4, 2016, at 8:30 a.m. Eastern Time. Participants can call toll-free (from U.S./Canada) 1-877-269-7756; international callers dial +1-201-689-7817. A live webcast of the conference will be available on the investor relations area of the company’s website, www.xpo.com/investors. The conference will be archived until September 4, 2016. To access the replay by phone, call toll-free (from U.S./Canada) 1-877-660-6853; international callers dial +1-201-612-7415. Use participant passcode 13640360.
Related: How Last Mile Delivery Affects the Supply Chain