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RXO Q3 earnings: First look

Only a few weeks of data from Coyote Logistics deal included, as company posts operating loss

John Kingston
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A First Look at RXO's earnings, released early Thursday. (Photo: Jim Allen/FreightWaves)

Here are some highlights from RXO’s third-quarter earnings report:

  • The earnings are the first at RXO (NYSE: RXO) to reflect numbers from Coyote Logistics. However, that deal closed Sept. 16, so it is a relatively minor part of the numbers.
  • RXO’s operations lost money in the quarter. The operating loss was $20 million compared to operating income a year earlier of $6 million. RXO had transaction, integration, restructuring and other costs that impacted GAAP earnings by $1.86 per share. It showed up on the earnings report under “other expense” and was $216 million. The net loss of $243 million came out to $1.81 per share.
  • Operating revenues were higher. Truck brokerage revenues rose 10.8% to $655 million. Last-mile revenue was up 4.7% to $268 million. Managed transportation revenue, however, dropped 7.4% to $151 million. 
  • The truck brokerage gross margin fell 140 basis points, to 13.7%. Complementary services, which includes last mile, managed transportation and freight forwarding, rose by 150 bps to 21.5%. The end result was a corporate gross margin of 17.3%, down 40 bps. RXO doesn’t expect the brokerage group to move much in the fourth quarter, foreseeing a Q4 gross margin of between 12% and 14%.
  • The earnings report breaks out what it called “legacy RXO” from Coyote data. For the almost 12-month period between Oct. 1, 2023, and the last day before the Coyote closing, Coyote had adjusted earnings before interest, taxes, depreciation and amortization of $66 million. During that same period, legacy RXO had adjusted EBITDA of $130 million. Coyote’s adjusted EBITDA for the two weeks it was part of RXO during the quarter was negative $2 million.
  • The earnings statement cited two numbers about complementary services beyond the financial figures. It said the managed transportation operationssigned on more than $300 million in new freight under management in its sales pipeline. And last-mile stops rose 11% year on year.

RXO’s earnings call was scheduled for 7 a.m. EST Thursday.


More articles by John Kingston

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.