XPO Logistics has announced its financial results for Q3 2020. Revenue increased to $4.22bn, compared with $4.15bn for the third quarter 2019. Operating income was $223m, compared with $229m for Q3 2019.
Brad Jacobs, chairman and chief executive officer of XPO Logistics, said, “Our business rebounded dramatically in the third quarter. Revenue, adjusted EBITDA, adjusted EPS and free cash flow were all decisively higher than expected. Our growth was broad-based, spanning our service offerings and geographies. Supply chain outsourcing is accelerating, and e-commerce continues to be a huge tailwind for us, particularly in contract logistics and last mile. We grew our last mile revenue by 11% in the quarter, year-over-year, by leveraging our North American hubs and XPO Direct network. In truck brokerage, we realized revenue growth of 27%, with a 13% increase in net revenue per load. Our XPO Connect technology is a major driver of these results — all of our non-asset transportation services now use this powerful platform to manage their freight movements.”
Jacobs continued, “Importantly, in North American less-than-truckload, our focus on yield, service and efficiency improved our third quarter operating ratio to 81.7%, the best operating ratio of any quarter in the history of our LTL operation. Our adjusted OR was also a record at 79.7%.”
The company’s transportation segment generated revenue of $2.68bn for Q3 2020, unchanged from the same period a year ago. Operating income for the transportation segment was $202m for Q3 2020, compared with $208m for the same period in 2019. Adjusted EBITDA for the segment was $329m for the quarter, compared with $333m for the same period in 2019. Segment operating income and adjusted EBITDA for the third quarter 2020 include a $6m impact from COVID-related costs, including $4m in less-than-truckload.
In North American less-than-truckload (LTL), yield excluding fuel increased by 1.7% Y-o-Y for Q3 2020. The third quarter operating ratio for LTL was a quarterly record at 81.7%.
The company’s logistics segment generated revenue of $1.58bn for Q3 2020, compared with $1.51bn for the same period in 2019. Segment revenue growth was led by strong demand from e-commerce and other consumer-related verticals, partially offset by COVID impacts in other areas and the company’s exit from certain low-margin business.
Logistics segment operating income was $77m for Q3 2020, compared with $61m for the same period in 2019. Adjusted EBITDA was $162m for the quarter, compared with $142m for the same period in 2019. The increases in operating income and adjusted EBITDA are primarily related to the increase in segment revenue, partially offset by higher labour and facility costs. Segment operating income and adjusted EBITDA for Q3 2020 include a $3m impact from COVID-related costs.
Corporate expense was $56m for the third quarter 2020, compared with $40m for the same period in 2019. The year-over-year increase in corporate expense was primarily due to higher expenses for incentive compensation, insurance and purchased services.
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