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Broker Echo Global Logistics exits on a high

Q3 easily ahead of estimates

Freight broker Echo Global Logistics rides a hot transportation market one last time, publicly at least, to beat third-quarter estimates on Tuesday. The company reported adjusted earnings of 93 cents per share, 20 cents ahead of consensus and more than double the year-ago result of 40 cents.

Echo (NASDAQ: ECHO) announced in September that it entered into an agreement to be acquired by private equity firm The Jordan Co. in a deal that values Echo at $1.3 billion.

Echo’s consolidated revenue was up 43% year-over-year to $986 million in the quarter. A significant increase in revenue per load sent both truckload and less-than-truckload revenue higher.

Brokered TL volumes increased 15% year-over-year with revenue up 51% to $738 million. Less-than-truckload volumes were up 3% with revenue per load making up the rest of the 25% top-line increase to $220 million.

Transactional revenue accounted for 77% of total revenue with managed transportation providing the rest.

Adjusted gross profit increased 39% year-over-year to $139 million. The 14.1% adjusted gross profit margin was 40 basis points lower than the third quarter of 2020.

Brokerage companies continue to be top M&A targets for investors.

Last week, Hub Group (NASDAQ: HUBG) acquired refrigerated truck broker Choptank Transport for $130 million in cash. ArcBest (NASDAQ: ARCB) announced it is acquiring Chicago-based TL broker MoLo Solutions in September. That deal could easily exceed the initial $235 million purchase price. Uber Freight (NYSE: UBER) acquired Transplace in July for $2.25 billion.

The transaction for Echo still needs the blessing of shareholders and regulators but is expected to close in the fourth quarter. If successful, the deal represents a 54% premium to the Echo’s share price at the time of the announcement.


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The FREIGHTWAVES TOP 500 For-Hire Carriers list includes Daseke (No. 21), ArcBest (No. 26) and Hub Group (No. 29).

2 Comments

  1. These Brokers are what caused a large part of the crisis we are in. Every load is a back haul and they earn more profits than the carrier performing the work.

    Carriers need to learn to use brokers as a last resort, they are forcing drivers out of the industry..

Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.