Contract logistics provider GXO Logistics Inc. marked its first anniversary as a public company by reporting better-than-expected second-quarter results and boosting its full-year guidance for revenue and earnings.
The Greenwich, Connecticut-based company (NYSE: GXO), which began trading Aug. 2, 2021, after being spun off by XPO Logistics Inc., (NYSE: XPO) posted adjusted diluted earnings per share of 68 cents, up from 44 cents per share in the year-earlier quarter, and 5 cents per share above analysts’ consensus estimates.
Adjusted earnings before interest, taxes, depreciation and amortization came in at $176 million, up from $150 million. Revenue rose 15% to $2.16 billion.
GXO said it won $475 million in new business in the quarter, a quarterly record.
For the full year, the company raised its guidance for organic revenue growth to 12% to 16%, from 11% to 15%. Adjusted EBITDA guidance was raised to a range of $715 million to $750 million from $707 million to $742 million. Adjusted diluted earnings per share is expected to come in at $2.70 to $2.90 per share, which is unchanged from prior estimates.
Reverse logistics accounted for about 40% of the new wins in the quarter, a figure that CFO Baris Oran said in a Wednesday interview was unusually high. Oran said, however, that reverse logistics demand will remain strong as e-commerce companies and e-tailers look for ways to maximize value from the growing mountain of returns traffic. Reverse logistics accounts for about 10% of GXO’s annual revenue stream, Oran said.
E-commerce, omnichannel retail and consumer technology composed slightly more than half of GXO’s quarterly revenue from its four main verticals. Food and beverage came in a distant second. The U.K. accounted for more than one-third of GXO’s revenue at $777 million. The U.S. was second with $685 million. Revenue growth from GXO’s three other main areas — France, the Netherlands and Spain — was flat to slightly up or down. Oran attributed the flatness to the unfavorable impact of currency fluctuations rather than a falloff in demand.
GXO is not yet seeing major macroeconomic downturns in its service areas, Oran said. The company’s business is generally stable with most of its contracts of a five-year duration, Oran said. This insulates GXO from quarter-to-quarter or year-over-year economic volatility, he said.
GXO closed in late May on its acquisition of U.K. firm Clipper Logistics. Oran said Clipper did not contribute materially to GXO’s second-quarter results.
GXO operates more than 900 facilities in 28 countries, covering 200 million square feet. Spun off last summer from XPO Logistics Inc., it is the world’s largest contract logistics provider.
GXO shares closed on Wednesday up 4.7% to $52.11 a share. Shares are down more than 20.2% over the past 12 months.