Driven by top line sales growth and a booming e-commerce market, the roll-up trucking and third-party logistics provider reported the highest revenues, net income and cash flow of any quarter in its history, CEO Brad Jacobs tells American Shipper.
XPO Logistics generated $293.7 million of cash flow from operations, and $183.2 million of free cash flow during the third quarter of 2017.
XPO Logistics reported a net income of $71 million for the third quarter of 2017, a sharp increase from a net income of $21.3 million for last year’s third quarter, according to the company’s most recent financial statements.
This increase was driven by various factors, including top line growth due to sales, cost control as XPO grows margins, and leadership positions in the fastest growing parts of transportation, particularly e-commerce, Brad Jacobs, chairman and chief executive officer of XPO told American Shipper.
The Greenwich, Conn.-based trucking and third-party logistics provider’s net income attributable to common shareholders totaled $57.5 million for the quarter, up from $13.8 million for the third quarter of last year.
Meanwhile, revenues ticked up 4.7 percent year-over-year to $3.89 billion.
About 60 percent of XPO’s revenues are generated in the United States, while 13 percent come from France and 12 percent come from the United Kingdom. Retail and e-commerce account for the largest portion of the company’s revenues at 26 percent, with food and beverage trailing behind at 14 percent, and industrial manufacturing at 10 percent.
During the quarter, the transportation segment’s revenues totaled $2.47 billion, a 2.5 percent boost from last year’s third quarter, which XPO attributed to increases in North American freight brokerage, less-than-truckload and last mile, and European less-than-truckload.
Meanwhile, revenues in the logistics segment stood at $1.46 billion or the quarter, surging 8.3 percent year-over-year, which XPO said was led by strong demand for contract logistics both in Europe and North America, partially offset by a decline in managed transportation revenues in North America.
During the quarter, XPO generated $293.7 million of cash flow from operations, and $183.2 million of free cash flow. Jacobs said free cash flow generated significantly surpassed analyst expectations. Analysts projected the company’s free cash flow for the quarter would range between $100 million and $150 million, he said.
Overall, XPO generated the highest revenues, net income and cash flow of any quarter in the company’s history.
Commenting on the quarter, Jacobs said in the earnings release that XPO “benefited from positive market dynamics, including e-commerce demand for contract logistics and last mile, growth in intermodal, and a brokerage market that is trending in our favor.
“Our sales force has closed $2.1 billion of new business through September, up 49 percent, and our pipeline continues to exceed $3 billion globally,” he added.
In regards to further acquisitions, back in August, Jacobs had said that bigger deals in the billions of dollars would not be finalized soon, but that XPO was in discussions regarding smaller deals, which could occur at any time. He said XPO primarily had its sights set on Western Europe and North America, and mainly on asset-light companies.
He told American Shipper yesterday that as far as XPO’s acquisition plans go, nothing has changed and that at the moment, the company has nothing new to announce on that front.