XPO Logistics Reports Fourth-Quarter Loss of $62.8 Million
Reflecting the acquisitions of Con-way and French firm Norbert Dentressangle last year, XPO, of Greenwich, Connecticut, nearly quadrupled revenue to $3.34 billion from $830.7 million. In the year-earlier period, the loss was $51.5 million, or 77 cents.
XPO reported $559 million in Con-way LTL revenue from two months of ownership but did not provide year-over-year profitability comparisons in the statement. In the comparable prior-year period, Con-way’s LTL business generated $36.8 million of profit before interest and taxes, accounting for about 90% of the company’s profit on that business and $897.2 million in LTL revenue.
CEO Bradley Jacobs told Transport Topics that the operating ratio at the LTL business was 95.0 in November and December, an improvement from the 95.9 in those same two months of 2014.
“We are certainly not going to stop at a 95.0 OR,” he said. “Give us time. It is a totally different company than it was four months ago.”
Con-way was acquired for $3 billion, five months after the purchase of Norbert Dentressangle.
XPO has targeted $170 million to $210 million in annual cost reductions at its LTL unit and already has reduced expenses by $50 million annually.
XPO reported tons per day slipped 3.6%, shipments per day fell 4% and rates per 100 pounds of freight were down 2.4% including fuel surcharge, and 3% higher excluding the fees.
On the positive side, net revenue, or the amount remaining after paying transport costs, improved in XPO’s other businesses, including brokerage, last-mile, expedited and global forwarding businesses.
Transportation revenue, including LTL, more than tripled to $2.1 billion, and operating income in that business was a $6.1 million loss. Operating income in the logistics business was $34.8 million, with revenue of $1.27 billion.
The company that is poised to become No. 3 on the Transport Topics Top 100 list of the largest for-hire carriers in the United States and Canada as a result of the 2015 acquisitions also reported results for the quarter on an adjusted basis, which excluded acquisition-related and other one-time costs. On that basis, the loss was $23.1 million, or 21 cents.
Jacobs said adjusted earnings before taxes, interest and depreciation rose 33%, excluding the effect of acquisitions.
“We realized higher-than-expected EBITDA and operating income, led by our European logistics business,” Jacobs said in a statement.
In addition, he said the company plans to accelerate cross-selling of freight and optimize its spending on transportation.
The company also expects a 20% increase this year in last-mile deliveries of products such as appliances.
Jacobs also told TT that truckload freight markets are soft. However, the brokerage unit is having a good year because purchased transport expenses have fallen, resulting in higher margins.
The XPO executive touted a number of recent contract wins, including the largest ever by XPO or any of its predecessors, a $600 million deal with a European food company.
