XPO Logistics Notches First Full-Year Profit Since 2011
XPO Logistics posted its first full-year profit of the Brad Jacobs era, with net income of $63.1 million, or 53 cents a share, compared with a $245.9 million loss in 2015, or $2.65, the company said Feb. 21.
Improvement in the company’s less-than-truckload business was a major contributor to the gain. Based in Greenwich, Connecticut, XPO last had a full-year profit in 2011, the year Jacobs, the chairman and CEO, purchased a controlling interest in September.
XPO, No. 3 on the Transport Topics Top 100 list of for-hire carriers in the United States and Canada, also was profitable for the fourth quarter, its third straight quarter of positive net income.
“It was a great quarter,” Jacobs said in an interview. “The strategy is working. We’re producing high revenue growth and returns for investors.”
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Annual revenue nearly doubled to $14.62 billion from $7.62 billion.
In the 2016 fourth quarter, the company earned $27.3 million, or 22 cents a share, on revenue of $3.68 billion. During the last three months of 2015, the company had a net loss of $62.8 million, or 58 cents, on revenue of $3.34 billion.
North American LTL is XPO’s largest single division. In the fourth quarter, it generated operating income of $54.7 million on revenue of $844.8 million. In the 2015 fourth quarter, operating income was $26.8 million on revenue of $850.9 million.
Quarterly operating ratio — expenses as a percentage of revenue — improved to 93.5 from 96.9.
Making more money on less revenue was the result of “our investments in sales, training and incentives — a whole slew of operating improvement efforts,” Jacobs said, especially seeking out denser freight.
Midwestern farmers make good customers because of the ease of hauling seeds, Jacobs said.
“They’re dense and have a high weight and have a low potential for damage — it’s not like glass,” he said.
Changing his view from 2016 to the current year, Jacobs said his customers generally are encouraged.
“The combination of lower taxes and less government regulation expected means they’re optimistic and doing more business,” he said.
XPO does a majority of its work in North America ,but it also has a major European presence. Its other main business lines include last-mile delivery, contract logistics, freight brokerage and freight forwarding.
