XPO turns in solid Q4 results to end 2023

Greenwich, Conn.-based less-than-truckload (LTL) carrier services provider XPO reported strong fourth quarter earnings results amid an ongoing soft freight transportation environment.

Quarterly revenue, at $1.94 billion, was up 6% annually, and adjusted earnings per share fell 21.4% annually, to $0.77.

XPO officials cited various growth drivers that factored into its quarterly earnings revenue growth, including higher yield, excluding fuel, as well as an increase in tonnage per day in its North American LTL segment, which was partially offset by lower fuel surcharge revenue.

“We delivered fourth quarter results that were solidly above expectations, reflecting substantial momentum in service quality, pricing and productivity,” said Mario Harik, chief executive officer of XPO, in a statement. “Companywide, year-over-year, we grew revenue by 6% and adjusted EBITDA by 28%, excluding real estate gains in 2022. In North American LTL, we outperformed on every key operating metric. This includes fourth quarter yield growth, excluding fuel, of 10.3%, adjusted operating income growth of 51%, and adjusted operating ratio improvement of 380 basis points. Our tonnage per day was 2% higher than a year ago, with nearly 6% more shipments per day.

Behind each of these gains is our LTL 2.0 growth plan and our commitment to provide premium customer service. In the fourth quarter, we improved our damage claims ratio to a new company record of 0.3%. The more service quality we deliver, the more value our customers realize from doing business with us. This dynamic is a key driver of our margin expansion. It was gratifying to see our strategy take root in 2023, XPO’s first full year as a standalone LTL company in North America. Every positive trend in the business comes from our team’s strong execution. We’re excited to continue to capitalize on our momentum, while laying more groundwork for the years ahead.”

An XPO official told LM that in North American LTL, XPO continued to set records for service, with its damage claims ratio improving to 0.3%, a new company record), improving service quality by 64%, and customer satisfaction increased by more 40%, also a new company record. 

“As a result, customers gave us more business, and we earned a greater yield for the value we’re delivering: Tonnage in the quarter was 2% higher and we handled nearly 6% more shipments per day YoY. Our yield growth, excluding fuel, accelerated to 10.3%,” said the official. “We are still in the early innings, and there are huge growth opportunities ahead as we continue to drive service improvements, invest in our network and provide even more value to our customers.”