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XPO Logistics’ Revenues Saw Historic Peak in 3Q17

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XPO’s 3Q17 revenues

In 3Q17, XPO Logistics (XPO) registered quarterly revenues of ~$3.9 billion, indicating a 4.7% rise from ~$3.7 billion in 3Q16. Analysts polled by Thomson Reuters expected XPO to report revenues of ~$3.8 billion in 3Q17. So, XPO Logistics surpassed the analysts’ revenue target by 2.6%.

Excluding divestiture of the company’s North American Truckload unit and the impact of fuel and currency translations, XPO’s 3Q17 revenues rose 6.4% organically. XPO’s revenues in 3Q17 were the highest in the company’s history.

XPO’s 3Q17 revenue growth

XPO Logistics’ (XPO) 3Q17 revenue growth was fueled by increased last-mile revenues due to higher e-commerce deliveries. XPO’s Contract Logistics segment jumped 8% during the quarter, which also boosted revenues.

Plus, 15% growth in the company’s North American Truck Brokerage and Intermodal units’ revenues lifted the company’s overall operating revenues in 3Q17.

XPO Logistics mainly operates in two verticals: Transportation and Logistics. Its Transportation segment accounts for nearly 65.0% of the company’s pro forma gross revenues, including the impact of acquisitions. XPO’s Logistics vertical contributes ~35.0% of its pro forma gross revenues.

Peers’ 3Q17 revenues

The pure-play truckload road transporters (XTN) witnessed relatively lower top-line growth compared with LTL (less-than-truckload) companies. The spot rates in the LTL market moved upward at a faster pace compared with truckload spot rates. This gave a new lease on life to the LTL operators, which saw slow revenue growth until recently.

XPO Logistics’ revenues grew mostly due to large acquisitions in the past, adding importance to its organic growth. Changes in its peers’ 3Q17 revenues compared to 3Q16 follow:

  • United Parcel Service (UPS): ~$16.0 billion, up 7.0%
  • Old Dominion Freight Line (ODFL): $873.0 million, up 11.6%
  • YRC Worldwide (YRCW): $1.3 billion, up 2.5%
  • SAIA (SAIA): $350.0 million, up 4.0%

In the next section, we’ll discuss XPO’s Transportation segment’s revenues in 3Q17.

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