Unphased by a reported loss in the second quarter, fast-growing XPO Logistics is now projecting $23 billion in revenues by 2019, but the highly acquisitive company has sailed past similar projections regularly in its relatively short history.
The transportation and supply chain services provider XPO Logistics on Wednesday said it sustained a $30.1 million operating loss in the second quarter, nearly triple the loss in the corresponding period in 2014. The operating loss, however, was largely attributable to “transaction and integration costs” from its recent acquisitions, and as such, is not actually reflective of the XPO’s operational income.
But the fast-growing company, fresh from a transformative deal in the second quarter in which it acquired French trucking and contract logistics powerhouse Norbert Dentressangle for $3.5 billion, massively raised its projected revenue in four years to $23 billion.
In the second quarter, XPO’s revenue rose 109.1 percent, to $1.2 billion, thanks in part to the boost from the Norbert Dentressangle deal as well as a smaller one for drayage firm Bridge Terminal Transport.
Through the first half of the year, XPO’s revenue was $1.9 billion, up from $863.4 million in the first half of 2014.
The company has been on a buying spree since its inception, as it first targeted the North American freight brokerage market, before expanding into drayage, intermodal, contract logistics, freight forwarding, last mile, expedited, and European trucking operations.
The pace with which this expansion has taken place is breathtaking, and CEO Brad Jacobs has indicated that pace won’t slow any time soon.
Jacobs noted Wednesday that the company has already used its European network through Norbert Dentressangle to win a contract logistics deal in the U.S. for a major Spanish retailer, one that already had such a deal with the former French company.
He also cryptically mentioned that XPO had captured last mile business from a “coveted” e-commerce company.
“We’re continuing to grow the company at a rapid pace, well ahead of plan. In the second quarter, we more than doubled our gross revenue year-over-year, grew our net revenue four-fold, and increased adjusted EBITDA more than five-fold,” Jacobs said. “We’re in a strong position to act on acquisition opportunities on both sides of the Atlantic, with more than $1.2 billion in cash. Our new trajectory puts us on track to nearly triple the size of our company in four years.”
XPO said its organic growth in revenue from its transportation business in the second quarter was 10 percent, excluding the impact of lower fuel costs. Its total assets, including the $1.2 billion in cash mentioned by Jacobs, was $3.8 billion at the end of June.
(For an in-depth analysis of XPO’s business strategy and technology capabilities, read the American Shipper June feature story.)
XPO targets $23b in revenues by 2019
