XPO Logistics has announced its second-quarter 2020 financial results, which were impacted by the COVID-19 pandemic. Revenue was $3.50bn for the quarter, compared with $4.24bn for the same period in 2019.
Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) was $172m for the second quarter of 2020, compared with $455m for the same period in 2019. Adjusted EBITDA for the second quarter of 2020 excludes the impacts of $50m of restructuring costs, and $46m of transaction and integration costs, primarily related to the company’s terminated review of strategic alternatives. Adjusted EBITDA includes $48m of net incremental costs related to the COVID-19 pandemic.
The company’s transportation segment generated revenue of $2.13bn for the second quarter of 2020, compared with $2.75bn for the same period in 2019. The decrease in revenue primarily reflects the impact of COVID-19.
In Q2 2020 operating loss for the transportation segment was $15m, compared with operating income of $243m for the same period in 2019. Adjusted EBITDA for the segment was $146m for the quarter, compared with $362m for the same period in 2019. Operating loss and adjusted EBITDA include the impact of $27m of COVID-related costs.
In North American less-than-truckload (LTL), yield excluding fuel improved by 1.9% year-over-year for the second quarter of 2020. The second-quarter operating ratio for LTL was 93.6% and the adjusted operating ratio was 90.1%, both of which include the impact of $20m of COVID-related costs.
The company’s logistics segment generated revenue of $1.40bn in Q2 2020, compared with $1.53bn for the same period in 2019. The decrease in revenue primarily reflects the impact of COVID-19 and the company’s elimination of certain low-margin business.
Second-quarter 2020 operating loss for the logistics segment was $43m, compared with operating income of $61m for the same period in 2019. This was primarily related to the decrease in segment revenue, an increase in depreciation and amortisation expense, costs related to the company’s terminated exploration of strategic alternatives, restructuring-related expenses and COVID-19-related costs, partially offset by a reduction in temporary labour costs. Adjusted EBITDA for the segment was $83m, compared with $136m in Q2 2019. Operating loss and adjusted EBITDA include the impact of $19m of COVID-related costs.
Corporate expense was $83m in Q2 2020, compared with $46m for the same period in 2019. The increase in corporate expense includes approximately $23m of costs primarily related to the terminated exploration of strategic alternatives and restructuring, as well as $2m of COVID-related costs.
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “The ramifications of COVID-19 dominated the second quarter. Nevertheless, we beat expectations on revenue, adjusted EBITDA and adjusted EPS, and generated notably high cash flow from operations of $214m and free cash flow of $121m. Business trends improved across our segments and geographies as the quarter progressed and continued in July.”
Source: XPO
