XPO Logistics Reports Record Profit
XPO Logistics Inc. on Wednesday reported its first profitable quarter in at least four years as the company gained new customers and moved forward with integrating more than a dozen acquisitions.
The Greenwich, Conn.-based company, which has rolled up businesses from different corners of the logistics industry including multi-billion dollar acquisitions of transportation providers in the U.S. and Europe, posted a record $42.6 million profit for the second quarter. XPO reported a $75.1 million loss a year earlier.
The company also reported a record $170 million of free cash flow on and adjusted its target for free cash flow in the next quarter to $150 million from a range of $100 million to $150 million. Revenue for the quarter was $2.4 billion.
Mr. Jacobs said that the company is reducing its expenses by leveraging its larger size to secure better prices from suppliers. XPO has also improved margins by applying profitable practices from some of its recent acquisitions to the whole company.
XPO is growing revenue by offering end-to-end logistics solutions, from arranging freight transportation to managing warehouses to delivering goods to customers’ doors. The company, which has been rebranding all of its acquired companies under the XPO name and bringing them onto a shared software system, says that having large operations in both Europe and the U.S., with both supply chain and transportation services, have helped woo new customers like Spanish fast-fashion retailer Inditex SA, owner of Zara.
The rising popularity of e-commerce has been a key driver of growth, which also offers so-called “last mile” services, or the last leg of delivery to consumers. The company’s customers include IKEA, Lowe’s and mattress startup Casper Sleep Inc.
XPO’s transition to profitability comes amid weak demand for freight transportation, which has hit many of XPO’s competitors in the trucking industry.