US-based transport and logistics company, XPO Logistics, reported $4.15 billion USD in revenue and $117 million USD in net income attributable to common shareholders for the third quarter of 2019.
Operating income was $229 million USD for the quarter compared with $209 million USD for the same period in 2018.
Adjusted net income attributable to common shareholders, a non-GAAP financial measure, was $121 million USD for Q3 2019, unchanged from the same period a year ago. Adjusted diluted earnings per share, a non-GAAP financial measure, was $1.18 USD for the quarter, compared with $0.89 USD for the same period in 2018.
Adjusted net income attributable to common shareholders and adjusted diluted earnings per share for the third quarter 2019 exclude: $11 million USD, or $8 million USD after-tax, of restructuring costs, primarily severance; and a benefit of $4 million USD, or $3 million USD after-tax, of non-cash unrealised gains on foreign currency contracts.
Adjusted earnings before interest, taxes, depreciation and amortisation (‘adjusted EBITDA’), a non-GAAP financial measure, increased to $438 million USD for the third quarter 2019, compared with $415 million USD for the same period in 2018. Adjusted EBITDA for the third quarter 2019 excludes $11 million USD of restructuring costs, primarily severance.
For the third quarter 2019, the company generated $278 million USD of cash flow from operations and $257 million USD of free cash flow, a non-GAAP financial measure. Reconciliations of non-GAAP financial measures used in this release are provided in the attached financial tables.
XPO Logistics Chairman and CEO, Bradley Jacobs, said Earnings Per Share (EPS) grew by 54 per cent and adjusted EPS by 33 per cent year-over-year in the third quarter.
“We also delivered a solid beat on adjusted EBITDA, outpacing the macro through cost control and margin discipline.
In less-than-truckload, our adjusted operating ratio was a third quarter record. We remain firmly on track to generate at least $1 billion of EBITDA from LTL in 2021.
“Our significant investments in technology are creating tailwinds across our operations. We’re executing on 10 initiatives that represent a pool of $700 million [USD] to $1 billion [USD] of potential profit improvement over the next several years. One large opportunity is to apply our XPO Smart productivity tools to the $5 billion [USD] of annual costs related to our variable labor spend. All 10 initiatives are specific to XPO and largely independent of the operating environment. We’re very focused on the size of the prize and the meaningful potential uplift to our profitability.”
XPO Logistics’ transportation segment generated revenue of $2.68 billion USD for the third quarter 2019, compared with $2.85 billion USD for the same period in 2018. The reduction in segment revenue primarily reflects a decrease in freight brokerage and direct postal injection revenue from the company’s largest customer, lower rates in truck brokerage and ‘unfavourable’ foreign currency exchange, partially offset by growth in managed transportation.
The company's logistics segment generated revenue of $1.51 billion USD for the third quarter 2019, compared with $1.52 billion USD for the same period in 2018. Organic revenue growth was 2.4 per cent, led by consumer packaged goods, food and beverage and aerospace in North America, and by e-commerce in Europe, largely offset by a reduction in business from the company’s largest customer.