- Revenue increased to $4.22 billion, compared with $4.15 billion for the third quarter of 2019.
- Surging online sales and accelerating supply chain outsourcing drive revenue growth particularly in contract logistics and last mile.
XPO Logistics earning beat the previous period as strong sales from online shopping created increased requirements for contract logistics and last mile delivery.
The company reported Thursday $4.22 billion in third quarter revenue, a 1.6% increase from the same period last year, and up 9.4% from analysts forecast. Diluted earnings per share reported at $0.83, a 27% decrease from the previous year’s third quarter and $.50 up than forecast.
“Supply chain outsourcing is accelerating, and e-commerce continues to be a huge tailwind for us, particularly in contract logistics and last mile,” said XPO Chief Executive Brad Jacobs.
Last mile revenue up by 11% from last year’s third quarter while truck brokerage services earned 27% growth with a 13% increase in net revenue per load.
Adjusted EBITDA was $439 million for the third quarter of 2020, compared with $438 million for the same period in 2019. XPO forecasts its adjusted EBITDA to $410 million for the fourth quarter and $1.45 billion for the entire 2020.
“Our business rebounded dramatically in the third quarter,” with earnings and free cash flow were all higher than expected, Brad Jacob said.
The free cash flow is projected to $50 million in the fourth quarter with $500 million for 2020.
For the third quarter period, XPO’s transportation segment generated $2.68 billion with an operating income of $202 million. A strong e-commerce demand pushed its logistics segment revenue to $1.58 billion with a $77 million operating income.
Logistics companies are benefitting from retailers rushing to restock in advance of “buying peak season” as the pandemic has already created above normal levels for e-commerce volume.
CBRE forecast shows a projected sales growth of less than 2% year-on-year this peak season, but only 40% of e-commerce sales growth is expected in November and December combined.