Echo Global Logistics beats earnings estimates on strong volumes, rates

Gross margins compressed by 165 bps to 15.2%

Chicago-based freight brokerage Echo Global Logistics (NASDAQ: ECHO) reported its operational and financial performance for the fourth quarter of 2020 on Wednesday after markets closed.

Echo posted fully diluted earnings per share (EPS) of 41 cents and non-GAAP fully diluted earnings per share of 56 cents, easily beating the Wall Street consensus estimate of 35 cents per share. Non-GAAP fully diluted EPS was up 114.4% compared to the same period in 2019, when loose trucking capacity and low rates hit Echo’s volumes and gross profit per load.

Revenue was up 41.9% year-over-year to $754.3 million in Q4, and it wasn’t all from the extraordinary upward pressure on truckload rates that freight markets experienced in the second half of 2020; Echo outperformed on volume, too. Truckload revenue increased 56% on 19.6% higher volume, while less-than-truckload revenue grew 16% on 12.8% higher volumes. What’s especially notable about the volume growth is that Echo achieved it with a sales force that remained essentially unchanged at 1,665 sales employees and agents, down 0.2% or four people from the year-ago period.

“I’m incredibly proud of the results we posted in 2020. From quickly adjusting to working remotely in the first part of the year to then executing in an extremely competitive freight market with constrained capacity, Echo demonstrated why it is one of the top players in the industry,” said Doug Waggoner, Echo’s chairman and CEO, in a statement. “As we enter 2021 against the backdrop of continued strong demand and limited supply, we look to continue to invest in the technology and people that were the foundation for our success in 2020.”