GXO Logistics Inc. reported Wednesday fourth-quarter earnings per share of 83 cents, exceeding analysts’ estimates by 8 cents per share and up 10 cents a share from the 2021 period. Revenue rose 9.1% to $2.5 billion.
The Greenwich, Connecticut-based contract logistics provider (NYSE: GXO) posted $46 million in net income and a 23% increase in earnings before interest, taxes, depreciation and amortization (EBITDA), three times its organic revenue growth.
The company said it had closed $182 million in new wins in the quarter and had $2.1 billion in sales in its pipeline by year’s end.
E-commerce revenue rose 31%, and reverse logistics revenue increased 19% as GXO continued its integration of British reverse logistics specialist Clipper Logistics PLC, which GXO acquired late last year.
The company also reaffirmed its 2023 guidance first conveyed at its recent Investor Day, when it outlined annual projections through ’27.
CEO Malcolm Wilson told analysts Wednesday that the company is “cautiously confident” about 2023, adding that “business is in alignment with our expectations.” Wilson also said GXO has seen the worst of inflation in warehouse labor after more than a year of tight supply and steadily rising wages.
Baris Oran, GXO’s CFO, said in an interview late Wednesday that the best thing about the report was that “there were no surprises.”
Company executives said they are seeing strong “stickiness” among numerous verticals, most notably the semiconductor sector that requires the high level of warehouse automation that GXO is known for. The demand for automation is so strong that GXO has to be “careful not to oversell” its solutions for fear of potential service issues.
Oran said the company is seeing more activity from Eastern Europe due to geopolitical issues and longer supply chains that require the services of experienced contract logistics providers.
In what could be a huge tailwind for the company, GXO expects about $3.5 trillion worth of goods to be nearshored between now and 2027. This would create enormous waves of demand for third-party providers of all types, with billions of dollars in business generated in warehouse and related services, the company said.
Each 1% of trade that moves to Europe and North America represents a $1 billion opportunity for warehouse and ancillary services, Oran said.
NOVEMBER 7-9, 2023 • CHATTANOOGA, TN • IN-PERSON EVENT
The second annual F3: Future of Freight Festival will be held in Chattanooga, “The Scenic City,” this November. F3 combines innovation and entertainment — featuring live demos, industry experts discussing freight market trends for 2024, afternoon networking events, and Grammy Award-winning musicians performing in the evenings amidst the cool Appalachian fall weather.