XPO Earnings Jump 31% Despite Revenue Dip in Q4 2024
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XPO Inc. experienced a 31% improvement in earnings year over year despite a slight drop in total revenue during the fourth quarter of 2024, the company reported Feb. 6.
The Greenwich, Conn.-based less-than-truckload carrier posted net income of $76 million, or 63 cents a diluted share, for the three months ending Dec. 31. That compared with $58 million, 49 cents, during the same time the previous year. Total revenue decreased 1% to $1.92 billion from $1.94 billion.
“This morning, we reported a strong fourth quarter with year-over-year earnings growth and LTL margin expansion that outperformed the industry,” XPO CEO Mario Harik said during a call with investors. “I’m pleased with the substantial progress we’ve made at the trough of the trade market cycle. For the full year, we grew revenues by 4% to a record $8.1 billion companywide.”
XPO noted in the earnings report that the revenue decrease was due primarily to a lower fuel surcharge revenue in the North American LTL segment. The company also generated $189 million of cash flow from operating activities in the fourth quarter and ended the quarter with $246 million of cash and cash equivalents on hand.
“In the fourth quarter, we delivered a damage claims ratio of 0.2, which is an improvement from 0.3 last year,” Harik said. “We also improved our on-time performance year over year for the 11th consecutive quarter. This is a testament to the speed and reliability that our customers value in our network. Next, I want to talk about a lever that functions in every part of our plan, our network investment.”
Harik pointed out that an important piece of those investments has been centered on real estate. That includes the company bringing 25 new service centers online last year. He noted that expanding network capacity provides more opportunity to improve service. The company also invested in buying tractors and manufacturing its own trailers.
“We ended 2024 with an average fleet age of 4.1 years, giving us one of the youngest tractor fleets in the industry,” Harik said. “As a result, we’re operating our fleet at a lower cost per mile. Because we made these strategic investments throughout 2023 and 2024, we currently have nearly 30% excess door capacity and a robust fleet in the trough of the cycle.”
For the full year, XPO reported net income of $387 million, or $3.23 a share, on revenue of $8.07 billion, compared with net income of $192 million, $1.62, on revenue of $7.74 billion in 2023.
XPO Q4 2024 Earnings Press Release
North American LTL segment revenue decreased 2.6% to $1.16 billion from $1.19 billion during the same time the previous year. The report noted that shipments per day decreased 4.4% on a year-over-year basis, while tonnage per day decreased 5.7%, and yield increased 6.3%. Operating income increased 20.1% to $179 million from $149 million.
“Turning to our LTL segment, we’re making great strides in executing our plan and optimizing all parts of the business,” Harik said. “The results we’ve delivered so far are just the beginning of our potential. You can see that in the 260 basis point improvement in our adjusted operating ratio, which was better than our targeted range. This was underpinned by record customer service levels, which translated to profitable market share gains and above-market yield growth for the year. And we have a well-defined plan to keep driving our OR toward becoming industry best.”
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European Transportation segment revenue increased to $765 million from $753 million the prior year, primarily driven by pricing growth. Operating income was a loss of $11 million for the quarter, compared with a loss of $2 million for the same period in 2023. The earnings report noted that the prior-year operating loss included an $8 million litigation matter.
XPO ranks No. 5 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 3 on the LTL sector list.
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