XPO Logistics on Feb. 8 reported its highest revenue of any quarter in the fourth quarter of 2021, marking the fourth straight quarter that the company has set an earnings record, according to a release.
The company set a yearly earnings record, too, in fiscal year 2021, according to an XPO presentation to investors. Revenue was $3.4 billion last year, up 14% year-over-year and up 30% over 2020. The reported revenue beat analyst estimates of $3.269 billion.
XPO Logistics ranks No. 10 on the FleetOwner Top For-Hire Fleets of 2021 and one spot higher, No. 9, on the soon-to-be-released rankings for 2022.
Shares of XPO (Ticker: XPO) rose 7% in early trading Feb. 9, growing the company's market capitalization to nearly $7.9 billion. (The move up came despite Wolfe Research analyst Scott Group lowering his target for the stock to $87.) Over the past six months, however, the stock is still down nearly 20%.
See also: XPO Logistics expands less-than-truckload network
The U.S. freight transportation company, which primarily provides less-than-truckload (LTL) and truck brokerage, also set a Q4 2021 record for earnings before interest, taxes, depreciation, and amortization (EBITDA)—its measure of profit, according to the XPO release.
Its adjusted earnings per share came in at $1.34, the highest of any quarter in company history. XPO’s adjusted EBITDA was $323 million, again the most for any fourth quarter in company history and a 15% increase year-over-year and the sixth consecutive quarter that XPO delivered a quarterly record for adjusted EBITDA. The profit beat analyst estimates of $302 million.
After the strong fourth quarter, XPO issued full-year EBITDA guidance of $1.36 billion to $1.4 billion, with a midpoint of $1.38 billion—higher than Wall Street consensus, which was $1.34 billion to $1.35 billion. All the numbers factor in the spinoff of XPO’s logistics segment as GXO earlier in the fourth quarter.
Market segments also deliver revenue records, expansion
In LTL, XPO also delivered record Q4 revenue and its strongest yield acceleration, excluding fuel, for any quarter. The company also issued guidance for a greater than 100 basis points improvement in operating ratio for 2022 compared to 2021. According to the XPO release, the company remains on target to generate $1 billion of adjusted EBITDA in LTL this year.
XPO has been building its LTL business, which it acquired in 2015 from Con-way for $3 billion, Tara Mullins, XPO’s public relations director, said in an email to FleetOwner. “We gained momentum [in LTL] through the quarter and through January,” Mullins said, adding that XPO has a five-point plan for growing the business.
She said XPO continues to increase the graduations from its 130 in-house driver schools. It graduated more than 900 new drivers from its schools last year compared to 132 in 2020, Mullins said in her email, with a target to double the number of graduates to more than 1,800 in 2022.
She said XPO also expects to build more of its own equipment after adding a second trailer production line at its manufacturing plant in Searcy, Arkansas. The company goal is to double in 2022 the number of trailers it makes, Mullins added.
See also: XPO Logistics offers new benefits for driver trainees
XPO also wants to expand its network of freight terminals by investing in about 900 net new doors by the end of 2023, with plans to expand in Southern California, Atlanta, and other locations. Mullins said the company opened two new terminals with about 50 doors in Wisconsin and Arkansas in January. During Q4 2021, XPO opened its second-largest terminal in Chicago Heights, Illinois, with 264 doors.
It was also a blowout Q4 in truck brokerage for XPO, with loads up 22% year-over-year and net revenue in that segment of the company’s business up 10% against a big Q4 2020. “We continue to significantly outperform the market and take market share in truck brokerage,” Mullins said. “Technology was again the key driver.”
XPO Connect’s cumulative downloads more than doubled in the fourth quarter to over 600,000, and 70% of the loads XPO booked were created or covered digitally. Year-over-year carrier usage of XPO’s freight booking and tracking software was up 74%, Mullins said in her email.
