XPO Logistics has reported its financial results for the third quarter of 2015, recording revenues of $2.36bn, representing a substantial increase of 256.54% year-on-year. For the same period, the company reported an operating income of $44.1m which represented an improvement of 47.06% from a loss of $13.6m in Q3 2014. Consequently, margin stood at 1.87%.
Bradley Jacobs, Chairman and Chief Executive Officer of XPO Logistics, said of the results, “In our first full quarter of global results, we drove adjusted EBITDA to $166m, significantly exceeding our target. In our transportation segment, we improved margins year-over-year by optimizing our pricing and lowering our cost of purchased transportation in truck brokerage and intermodal, last mile, expedite and global forwarding. We’re operating our logistics segment more profitably worldwide, and we’re executing on an exciting pipeline of cross-selling opportunities. Our European operations overall are performing well ahead of expectations – adjusted EBITDA in Europe was up over 26% year-over-year for transport and 17% for logistics.”
The substantial growth in revenues was primarily attributed to the Transportation segment as a consequence of to XPO’s recent expansion through acquisitions, notably Con-Way and Norbert Dentressangle. The Transportation segment generated revenue of $1.4bn for the quarter, representing an increase of 128.1% from the same period in 2014. EBITDA growth was largely driven by the truck brokerage and last mile businesses.
The company’s logistics segment generated gross revenue of $993.3m, compared with $50.1m from the same period in 2014. Net revenue was $810.0m, up from $50.1m a year ago. Adjusted EBITDA was $88.1m, up from $8.0m a year ago. Operating income was $36.0m, versus $4.5m a year ago. EBITDA and operating income in the segment exceeded expectations, primarily due to new contracts, the shedding of unprofitable business, and operational improvements.
Revenue and profitability for the logistics segment for the third quarter of 2014 reflect a partial contribution from XPO’s acquisition of New Breed on September 2, 2014, and do not include XPO’s European operations, which were acquired on June 8, 2015.
XPO also announced full year targets for adjusted EBITDA of $1.25bn in 2016 and $1.7bn in 2018.
