Transport and logistics giant XPO Logistics Inc. (NYSE:XPO) ended 2020 on a strong note, posting the highest quarterly revenue in its 10-year history — paced by blowout results in truck brokerage — and laying out strong 2021 earnings guidance.
For the quarter, XPO posted adjusted diluted per-share earnings of $1.19, well above analysts’ consensus estimates of 67 cents. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $449 million, the best fourth-quarter mark in XPO’s history, and a 10% increase over Wall Street estimates. Revenue came in at $4.7 billion, up from $4.14 billion in the 2019 quarter. Operating income was $228 million, compared with $202 million for the fourth quarter of 2019.
XPO forecast $1.725 billion to $1.8 billion in adjusted 2021 EBITDA, which would be a 24% to 29% increase over 2020 levels. It also projected $600 million to $700 million in free cash flow, up from $554 million in 2020.
In the fourth quarter, the company’s transportation segment reported revenue of $2.94 billion, while the logistics segment posted revenue of $1.76 billion. The two businesses are scheduled to be split later this year, with the logistics segment spun off to shareholders as a stand-alone unit. The less-than-truckload and brokerage businesses will make up most of the transportation company, with the international and contract logistics operations making up the logistics concern. The transaction remains on track, XPO said Wednesday.
LTL operating ratio — the measure of revenues compared with expenses — hit a fourth-quarter record of 84.5%, excluding the gains from the sales of LTL-related real estate assets, the company said. This meant the LTL unit earned 84.5 cents for every $1 in expenses.
Truck brokerage was the star of the quarter. Revenue rose by 76% to $616 million, and net revenue rose 110% to $115 million, more than doubling the 2019 figures. Loads per day increased 26%, while net revenue per load jumped by 67%, the company said.
Brad Jacobs, XPO’s founder, chairman and CEO, said the results were “all much better than expected.” The company’s 2021 EBITDA guidance reflects strong macro tailwinds in e-commerce, supply-chain outsourcing and customer demand for the company’s digital capabilities, Jacobs said. Company executives will meet with analysts on Thursday morning to discuss the results.
XPO shares closed Wednesday’s session fractionally higher at $122.52 a share.