XPO Logistics, a leading less-than-truckload (LTL) carrier, reported impressive fourth-quarter earnings that surpassed analyst expectations, indicating robust financial performance and positive momentum heading into 2025. The company’s strategic investments and operational efficiency drove significant improvements in key performance indicators.
XPO announced adjusted earnings per share (EPS) of 89 cents, exceeding the consensus estimate by 26 cents and marking a 12-cent increase year over year. While consolidated revenue experienced a slight decline of 1% year over year to $1.92 billion, the company’s core LTL segment demonstrated resilience.
The LTL segment generated $1.16 billion in revenue, a modest decrease of 2.6% year over year. Although tonnage declined 5.7%, this was partially offset by a 1.7% increase in yield, further amplified to 6.3% excluding fuel surcharges. The segment’s adjusted operating ratio (OR) improved by 30 basis points to 86.2%, highlighting enhanced operational efficiency.
XPO’s full-year adjusted OR of 84.8% significantly surpassed management’s guidance of a 150 to 250 basis point improvement, showcasing the success of strategic initiatives despite cost pressures from expanding its network with 25 new terminals. CEO Mario Harik attributed this success to “landmark network investments that strengthen our competitive position in a freight market recovery and for the long-term,” emphasizing that this momentum will fuel continued margin expansion in the coming years.
In addition to its strong LTL performance, XPO’s European transportation segment reported a 1.6% year-over-year revenue increase to $765 million. However, the segment’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin decreased by 120 basis points to 3.5%.
It’s important to note that the adjusted EPS figure excluded transaction and restructuring costs but included a $34 million gain from real estate sales, equivalent to 21 cents per share. XPO hosted an analyst call on Thursday at 8:30 a.m. EST to discuss these results in detail. The company’s strong Q4 performance positions it well for future growth in the recovering freight market. XPO’s commitment to operational excellence and strategic investments suggests a positive outlook for long-term profitability and shareholder value.
