XPO Logistics (XPO) Tops Q1 EPS by 5c, Revenues Beat; Raises FY21 EPS Guidance Above Consensus

XPO Logistics (NYSE: XPO) reported Q1 EPS of $1.02, $0.05 better than the analyst estimate of $0.97. Revenue for the quarter came in at $4.77 billion versus the consensus estimate of $4.33 billion.

CEO Comments

Brad Jacobs, chairman and chief executive officer of XPO Logistics, said, “In the first quarter, we reported the highest revenue of any quarter in our history, appreciably outpacing a macro that’s recovering faster than expected. Our net income and adjusted EBITDA were both first quarter records, and we grew adjusted EPS by 112% year-over-year.

“Our truck brokerage business is continuing to outperform the market, powered by the growth of our XPO Connect digital platform. We increased our first quarter brokerage revenue by 83% year-over-year, and grew net revenue by 132%.

“In North American less-than-truckload, we improved our first quarter adjusted operating ratio, excluding real estate sales, by 220 basis points year-over-year to 84.3%. Our LTL business has strong momentum: our technology is expanding margin, and the recovery in the industrial economy is stimulating demand for our services.

“In logistics, our record first quarter revenue of $1.82 billion was propelled by the ‘big three’ logistics tailwinds: e-commerce, outsourcing and warehouse automation. We’ve won a tremendous amount of logistics business in the first four months of this year, including a $1.8 billion contract with a longstanding customer that extends and expands our relationship through 2032. This is the largest contract in our company’s history.”

Jacobs continued, “We now expect to grow our 2021 adjusted EBITDA by 31% to 35% year-over-year to a range of $1.825 billion to $1.875 billion, with strong contributions from both of our business segments.”

GUIDANCE:

XPO Logistics sees FY2021 EPS of $5.90-$6.50, versus the consensus of $5.41.

The company issued new full year guidance as follows:

• Adjusted EBITDA of $1.825 billion to $1.875 billion, compared with the prior guidance of $1.725 billion to $1.8 billion. The new range for adjusted EBITDA reflects a year-over-year increase in adjusted EBITDA of 31% to 35% from 2020, comprised of:
  • 28% to 32% growth in adjusted EBITDA in the logistics segment; and
  • 30% to 34% growth in adjusted EBITDA in the transportation segment.
• Depreciation and amortization of $625 million to $645 million, excluding $145 million of acquisition-related amortization expense;
• Interest expense of $270 million to $280 million;
• Effective tax rate of 24% to 26%; and
• Adjusted diluted EPS of $5.90 to $6.50, up from the prior range of $5.10 to $5.85.

With respect to 2021 cash flows, the company issued the following targets:

• Gross capital expenditures of $650 million to $700 million, up from the prior range of $625 million to $675 million;
• Net capital expenditures of $500 million to $550 million, up from the prior range of $475 million to $525 million; and
• Free cash flow of $650 million to $725 million, up from the prior range of $600 million to $700 million.

The company’s 2021 guidance excludes impacts associated with the planned spin-off of the logistics segment; and assumes 113 million diluted shares outstanding.

For earnings history and earnings-related data on XPO Logistics (XPO) click here.

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