Greenwich, Connecticut-based XPO reported first-quarter results that were well ahead of analysts’ expectations on Thursday as its less-than-truckload unit won share at above-market rates.
XPO (NYSE: XPO) reported adjusted earnings per share of $1.01, 13 cents ahead of the consensus estimate and 28 cents higher year over year. The adjusted EPS result excluded transaction and restructuring costs. A lower tax rate was roughly a 5-cent tailwind in the quarter.
Consolidated revenue of $2.1 billion was 7% higher y/y and above the $2.04 billion consensus estimate.
Table: XPO’s key performance indicators
The company’s LTL unit reported a 5% y/y revenue increase to $1.23 billion. Revenue was 6% higher on a per-day comparison. A slight tonnage increase coupled with a 5% increase in revenue per hundredweight (yield) drove the result. (Yield was up 4% y/y excluding fuel surcharges.)
The change in tonnage was driven by a 3% increase in daily shipments, which was mostly offset by a 2.7% decline in weight per shipment. Lower shipment weights and a 1% increase in length of haul positively impacted the yield metric. Revenue per shipment (excluding fuel) increased 1% y/y.
The company credited “profitable market share gains” and “above-market pricing growth” for the improvements.
The segment reported an 83.9% adjusted operating ratio (inverse of operating margin), which was 200 basis points better y/y and 50 bps better than the seasonally stronger fourth quarter. (The unit normally records 50 bps of sequential deterioration in the first quarter.)
Sequentially, revenue per day increased 3% from the fourth quarter as tonnage per day was up 5% and yield slid 2%. (The yield metric was negatively impacted by a sequential increase in shipment weights and a decline in length of haul.)
XPO’s European transportation segment reported an 11% y/y increase in revenue to $868 million. Adjusted EBITDA of $33 million was 3% higher y/y.
“We’re continuing to deliver robust incremental margins and industry-leading operating ratio improvement, with the greatest upside still ahead,” said Mario Harik, chairman and CEO, in a news release. “We have a clear path to compounding earnings growth and accelerating free cash flow generation, with returns amplified as freight demand recovers.”
Shares of XPO were up 1% in premarket trading on Thursday.
XPO will host a call at 8:30 a.m. EDT on Thursday to discuss first-quarter results.
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