XPO Logistics has announced financial results for Q1 2020, reporting Q1 2020 revenues of $3.86bn, compared to $4.12bn in Q1 2019. Operating income is reported to be $81m for Q1 2020, down $51m Y-o-Y.
For the first three months of 2020, the company generated $180m of cash flow from operations, compared with a cash usage of $96m for the same period in 2019.
Transportation
The company’s transportation segment generated revenue of $2.46bn for the first quarter 2020, compared with $2.66bn for the same period in 2019. The decrease in revenue primarily reflects the negative impact of COVID-19 and the previously disclosed downsizing of business by the company’s largest customer.
Operating income for the transportation segment was $120m for the first quarter 2020, compared with $128m for the same period in 2019. The decrease in operating income is primarily related to the decrease in segment revenue and to higher transaction and integration expenses.
North America
Revenue for North America Freight Brokerage fell by $33m to $586m in Q1 2020; LTL decreased by $16m to $910m; Last Mile saw a drop of $23m to $201m in Q1 2020, and Managed Transport fell by $41m to $83m.
Europe
Revenue for Europe Freight Brokerage and Truckload fell to $437m in Q1 2020, a $36m drop Y-o-Y; LTL decreased by $28m to $225m.
Logistics
The company’s logistics segment generated revenue of $1.44bn for the first quarter 2020, compared with $1.49bn for the same period in 2019. The decrease in revenue primarily reflects the company’s elimination of certain low-margin business, the downsizing of business by the company’s largest customer, and the negative impact of COVID-19 in Europe.
North America & Europe
Revenue in North America for the Logistics division fell by $26m in Q1 2020, to $572m; whereas Europe saw a drop of $31m, from $896m in Q1 2019, to $865m in Q1 2020.
Logistics segment operating income was $38m for the first quarter 2020, compared with $46m for the same period in 2019. The decrease in operating income is primarily related to the decrease in segment revenue, higher transaction and integration expenses, and higher depreciation and amortization expense.
Corporate
Corporate expense was $77m for the first quarter 2020, compared with $42m for the same period in 2019. The increase in corporate expense primarily reflects approximately $28m of professional fees and employee retention costs associated with the company’s terminated review of strategic alternatives.
Bradley Jacobs, CEO of XPO Logistics, said, “Our results were tracking well until mid-March, when COVID-19 reached pandemic proportions. At that point, our end markets rapidly deteriorated. We acted quickly and took comprehensive safety measures to protect our employees on the front line. […] Importantly, XPO has $2.5bn of liquidity and an ironclad business model. Even against the current backdrop, we’re on track to generate hundreds of millions of dollars of free cash flow this year. We’re ready to serve customers through the fits and starts of the recovery, however long it takes, with our e-commerce capabilities, intelligent automation in our warehouses, a digitally connected transportation platform and keen visibility into operating data.”
Source: XPO Logistics
