XPO Logistics: We delivered a record first quarter

XPO Logistics, Inc. has announced its financial results for the first quarter 2022. Revenue increased to $3.47 billion for the first quarter, compared with $2.99 billion for the same period in 2021.

Net income from continuing operations attributable to common shareholders was $489 million for the first quarter, compared with $63 million for the same period in 2021. Operating income was $625 million for the first quarter, compared with $139 million for the same period in 2021. Income from continuing operations was $489 million, compared with $63 million for the same period in 2021. Diluted earnings from continuing operations per share was $4.23 for the first quarter, compared with $0.56 for the same period in 2021.

Adjusted net income attributable to common shareholders, a non-GAAP financial measure, increased to $145 million for the first quarter, compared with $89 million for the same period in 2021. Adjusted diluted earnings from continuing operations per share, a non-GAAP financial measure, was $1.25 for the first quarter, compared with $0.79 for the same period in 2021.

Adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), a non-GAAP financial measure, increased to $321 million for the first quarter, compared with $279 million for the same period in 2021.

For the first quarter 2022, the company generated $200 million of cash flow from operating activities and $66 million of free cash flow, a non-GAAP financial measure.
 Reconciliations of non-GAAP financial measures used in this release are provided in the attached financial tables.

Raises 2022 Outlook

After adjusting for the sale of the intermodal operation, the company raised its 2022 target for adjusted EBITDA, and updated the underlying metrics, to reflect its higher expectations for 2022 financial performance:

• Adjusted EBITDA of $1.35 billion to $1.39 billion, including second quarter adjusted EBITDA of $360 million to $370 million;
• ​North American LTL expected to generate at least $1 billion of full year adjusted EBITDA;
• Year-over-year improvement of more than 100 basis points in North American LTL adjusted operating ratio, excluding gains on sales of real estate;
• Depreciation and amortization of approximately $385 million, excluding amortization of acquisition-related intangible assets;
• Interest expense of $150 million to $160 million;
• Effective tax rate of 24% to 25%; and
• Adjusted diluted EPS of $5.20 to $5.60, excluding amortization of acquisition-related intangible assets, and assuming 117 million diluted shares outstanding at year-end 2022.

With respect to 2022 cash flows:

• Gross capital expenditures of $500 million to $550 million;
• Net capital expenditures of $425 million to $475 million; and
• Free cash flow of $400 million to $450 million, excluding all transaction-related impacts.

 Brad Jacobs, chairman and chief executive officer of XPO Logistics, said: “We delivered a record first quarter, with significant beats across revenue, net income, adjusted EBITDA and adjusted EPS. We’re executing on multiple avenues for value creation — the spin-off of our tech-enabled brokered services platform, the sale or listing of our European business, our continued deleveraging, and company-specific initiatives for the ongoing transformation of our North American LTL business.

“Over the last six months, we’ve been investing in making our LTL network larger and more efficient, with more to follow. Service levels have markedly improved, and our yield was a record first quarter increase of 9% from a year ago. We continue to expect our adjusted operating ratio to inflect to year-over-year improvement later this quarter, with an improvement of more than 100 basis points for the full year. We plan to drive hundreds of additional basis points of improvement in the coming years.

“Our best-in-class truck brokerage business gained share again in the quarter, with year-over-year load growth of 23%. Shippers increasingly want cutting-edge brokerage automation, and our XPO Connect platform gives them access to more than one and a half million carrier trucks. We’re creating or covering 74% of our brokerage loads digitally on the platform, up four percentage points from the fourth quarter.”

Jacobs continued, “Following our eighth straight beat on adjusted EBITDA in the quarter, our April results accelerated both sequentially and year-over year in many of our key metrics. We raised our full-year financial outlook by more than the beat to reflect our momentum.”