XPO (NYSE:XPO) Issues Earnings Results

Key Points

• XPO exceeded quarterly expectations: Revenue rose 13.2% year over year to $2.35 billion, while EPS of $1.70 beat consensus by $0.22 and increased from $1.05 a year earlier.
• North American LTL operations delivered record efficiency: The adjusted operating ratio improved 300 basis points to 79.9%, prompting management to raise its full-year improvement target to at least 200 basis points.
• Growth trends strengthened, though costs remain a concern: July tonnage and shipments increased more than 6% year over year, supported by market-share gains and improving industrial demand, while labor and benefit inflation continue to pressure margins.

XPO (NYSE:XPO - Get Free Report) announced its earnings results on Thursday. The transportation company reported $1.70 earnings per share for the quarter, beating the consensus estimate of $1.48 by $0.22, FiscalAI reports. XPO had a return on equity of 26.21% and a net margin of 4.19%.The company had revenue of $2.35 billion for the quarter, compared to the consensus estimate of $2.28 billion. During the same period last year, the business posted $1.05 EPS. The company's revenue was up 13.2% on a year-over-year basis.

Here are the key takeaways from XPO's conference call:

• Record Q2 results: Revenue rose 13% year over year to $2.4 billion, while adjusted EBITDA excluding real-estate gains increased 25% to $425 million and adjusted diluted EPS rose 56% to $1.64.
• North American LTL adjusted operating ratio improved 300 basis points to a record 79.9%; management now expects full-year improvement of at least 200 basis points, versus its prior 100–150 basis-point target, and an operating ratio below 81% in Q3.
• Freight trends strengthened through the quarter, with July tonnage and shipments both up more than 6% year over year. Management expects mid-single-digit Q3 tonnage growth, supported by market-share gains, improving industrial demand, and some potential truckload-to-LTL conversion.
• Productivity initiatives exceeded targets, improving productivity by nearly 2.5 points year over year. AI-enabled route optimization and trailer-loading technology are reducing miles, improving load quality, and lowering pilot-site damage rates by 50%.
• Labor and benefit inflation remain cost pressures, with overall inflation estimated in the mid-single-digit range and driver hiring conditions tightening; management expects to offset these pressures primarily through productivity and labor adjustments.

XPO Price Performance

XPO traded up $0.35 on Thursday, hitting $199.73. 2,382,928 shares of the company were exchanged, compared to its average volume of 1,572,958. XPO has a fifty-two week low of $116.68 and a fifty-two week high of $232.05. The company has a debt-to-equity ratio of 1.71, a quick ratio of 0.99 and a current ratio of 0.99. The firm has a market capitalization of $23.45 billion, a P/E ratio of 68.40, a price-to-earnings-growth ratio of 2.35 and a beta of 1.85. The business's fifty day moving average is $210.31 and its 200 day moving average is $198.92.

Insider Activity

In other news, Director Allison Landry sold 2,400 shares of XPO stock in a transaction that occurred on Thursday, May 28th. The shares were sold at an average price of $215.61, for a total transaction of $517,464.00. Following the completion of the sale, the director directly owned 4,849 shares in the company, valued at approximately $1,045,492.89. This trade represents a 33.11% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Insiders own 0.87% of the company's stock.

Hedge Funds Weigh In On XPO

Several hedge funds have recently bought and sold shares of the company. Horizon Investments LLC purchased a new stake in XPO during the third quarter worth $39,000. Brown Brothers Harriman & Co. purchased a new stake in shares of XPO in the 4th quarter worth about $43,000. EverSource Wealth Advisors LLC grew its stake in XPO by 35.8% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 334 shares of the transportation company's stock valued at $42,000 after acquiring an additional 88 shares during the last quarter. Wiser Advisor Group LLC acquired a new stake in XPO in the 3rd quarter valued at about $50,000. Finally, Smartleaf Asset Management LLC increased its holdings in XPO by 13.8% during the 4th quarter. Smartleaf Asset Management LLC now owns 494 shares of the transportation company's stock valued at $68,000 after acquiring an additional 60 shares in the last quarter. 97.73% of the stock is owned by hedge funds and other institutional investors.

Analyst Ratings Changes

A number of equities analysts recently weighed in on the stock. Wells Fargo & Company lifted their price objective on shares of XPO from $235.00 to $250.00 and gave the company an "overweight" rating in a research report on Friday, June 5th. Evercore upgraded shares of XPO from an "in-line" rating to an "outperform" rating in a research note on Wednesday, July 1st. Citigroup started coverage on shares of XPO in a report on Wednesday, July 15th. They set a "market perform" rating for the company. Morgan Stanley set a $105.00 price objective on XPO and gave the company an "underweight" rating in a report on Friday, May 1st. Finally, Oppenheimer increased their target price on XPO from $228.00 to $236.00 and gave the stock an "outperform" rating in a research note on Monday, May 4th. Three analysts have rated the stock with a Strong Buy rating, sixteen have issued a Buy rating, five have assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average target price of $219.76.

XPO Company Profile

XPO Logistics, Inc is a global provider of transportation and logistics services, offering a broad portfolio of solutions designed to optimize supply chains for businesses of all sizes. The company's operations span freight brokerage, less-than-truckload (LTL) shipping, full truckload transportation, last-mile delivery, contract logistics and global forwarding. XPO aims to leverage advanced technology and operational expertise to drive efficiency, visibility and reliability across end-to-end supply-chain networks.

In its freight brokerage segment, XPO connects shippers to a network of carriers through digital platforms that facilitate rate comparisons, booking, tracking and settlement.

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