Less-than-truckload carrier XPO again reported earnings results ahead of analysts’ expectations on Thursday ahead of the market open.
XPO (NYSE: XPO) reported adjusted earnings per share of $1.05, which was 6 cents better than the consensus estimate but 7 cents lower year over year. (The adjusted EPS number excluded transaction and restructuring costs.)
Consolidated revenue was flat y/y at $2.08 billion, but outpaced the consensus estimate of $2.05 billion.
“We’re executing at a high level and consistently outperforming the industry, with a strategy that positions us to deliver long-term margin expansion and earnings growth,” CEO Mario Harik said in a news release.
XPO’s LTL unit reported a 2.5% y/y decline in revenue to $1.24 billion. A 6.7% decline in tonnage per day (shipments down 5.1% and weight per shipment down 1.7%) was partially offset by a 4.2% increase in revenue per hundredweight, or yield. (Yield was 6.1% higher y/y excluding fuel surcharges.)
Revenue per shipment and yield increased on a sequential basis, which was in line with management’s guidance.
Table: XPO’s key performance indicators
The segment reported an 82.9% adjusted operating ratio (inverse of operating margin), which was 30 basis points better y/y and 300 bps better than the first quarter. The result was at the top end of management’s guidance.
Purchased transportation expenses (as a percentage of revenue) were down 280 bps y/y as the carrier continues to insource linehaul shipments.
XPO continued to see y/y margin improvement as the rest of the legacy public carriers reported material declines in the quarter (340 bps on average) .
XPO’s European transportation segment reported a 4% y/y increase in revenue to $841 million with an adjusted earnings before interest, taxes, depreciation and amortization margin of 5.2%, 80 bps lower y/y.
Shares of XPO were up 0.5% in premarket trading on Thursday.
XPO will host a call to discuss second-quarter results on Thursday at 8:30 a.m. EDT.
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