GXO Logistics Inc. reported a strong performance in the second quarter, with revenue surging 19% year over year to $2.8 billion.
Adjusted quarterly earnings per share was 55 cents, compared with 70 cents for the first quarter in 2023.
Wall Street expectations had called for second-quarter earnings of 57 cents per share and revenue of $2.72 billion.
Company officials said they are on track to sign a record amount of new business this year and believe the freight market is on an upward trend.
“We believe we saw the bottom of the inventory cycle in the fourth quarter of last year,” CEO Malcolm Wilson said during a call with analysts Tuesday before the market opened. “We’re beyond that inflection point, and we’re seeing volume trends beginning to improve.”
Greenwich, Connecticut-based GXO (NYSE: GXO) is one of the largest pure-play contract logistics providers in the world. The company has more than 970 facilities totaling 200 million square feet, with a global workforce of more than 130,000 people.
Related: GXO Logistics’ Q1 revenue increases 6% to $2.46B
During the quarter, GXO also completed its $965 million acquisition of Wincanton, which will provide a platform for GXO to grow in aerospace and defense and industrial segments across Europe, Wilson said. Wincanton is a supply chain solutions company based in Chippenham, England.
GXO increased its full-year 2024 guidance, projecting revenue growth of 2% to 5%, adjusted earnings before interest, taxes, depreciation and amortization from $805 million to $835 million, and adjusted EPS between $2.73 and $2.93.
“During the second quarter, GXO signed about $270 million of new business contracts,” Wilson said. “We’re also seeing contract duration increase, as customers look to outsource to a trusted partner with global scale who can manage the complexity of their supply chain.”
In Germany, GXO signed a contract with retailer and coffee distributor Tchibo, along with a nearly billion-dollar contract with Levi. GXO also expanded services for several long-standing customers in the second quarter, including Boeing, Guess, Marks & Spencer, and Raytheon.
“Through the first half, we’ve won more than $520 million of new business … . [G]iven our increasing pipeline, we’re on track to sign a record amount of new business this year, underpinning our growth in 2025 and beyond,” Wilson said.
GXO is seeing positive signs in the freight market from European retailers restocking their inventories and planning for the holiday season.
“When we look across all of our regions right now, what we’re seeing is modest improvements in customer volumes compared to the last quarter,” Wilson said. “Core volumes, though, do remain relatively sluggish, generally flat year over year. But we have got some areas now where we can see definite improvements coming through. Deal sizes are getting bigger. The duration of contracts is getting bigger.”
The United Kingdom was GXO’s largest market, accounting for revenue of $1.28 billion during the second quarter. The United States was the company’s second largest market in the quarter at $731 million.
While the North American freight market has not experienced an uptick comparable to that of Europe, there are positive signs, Wilson said.
“While we’re not yet seeing that return to growth in the North American market, it’s still a little uncertain. What we are seeing is a tremendous amount of new business activity,” Wilson said. “We signed more new business in our North American business recently than for a long time. I think we’re on target for a record in our North American activity for new business signings.”
| GXO Logistics | Q2/24 | Q2/23 | Y/Y % Change |
| Revenue | $2.8B | $2.3B | 19% |
| Operating income | $75M | $99M | -24% |
| Net income | $38M | $65M | -42% |
| Adjusted earnings before interest, taxes, depreciation and amortization | $187M | $190M | -1.5% |
| Adjusted earnings per share | $0.55 | $0.70 | -21% |