Trucking and logistics provider XPO Logistics Inc. on Wednesday reported income and revenue hit a record-high of any quarter during the third quarter of 2017. C.H. Robinson and Hub Group, however, did not fare as well.
"All of our customers are saying fasten your seatbelts," XPO CEO Bradley Jacobs told the Journal of Commerce in an interview, referring to what the company expects to be a very busy peak holiday shipping season.
Net income was $57.5 million for the quarter, or 44 cents per share, compared with net income of $13.8 million, or 11 cents per share, for the same period in 2016.
While this was below a consensus estimate from a survey of analysts, the more than 300% surge in earnings reportedly marked the eighth straight quarter in which the Connecticut-based company beat year-earlier profits.
Revenue was $3.89 billion for the quarter, compared with $3.71 billion for the same period in 2016. Revenue increased year-over-year by $305.1 million, excluding third quarter 2016 revenue of $131.8 million from the North American truckload unit XPO sold off in October 2016.
“We benefited from positive market dynamics, including e-commerce demand for contract logistics and last mile, growth in intermodal, and a brokerage market that is trending in our favor,” said Bradley Jacobs, chairman and CEO. “Our diversification is yielding results."
The company's transportation segment generated revenue of $2.47 billion in the quarter compared with $2.41 billion for the same period in 2016, which included $131.8 million of revenue from the North American truckload unit it previously owned.
Segment revenue was led by increases in North American freight brokerage, less-than-truckload and last mile, and European less-than-truckload, according to XPO.
Operating income for the transportation segment increased to $145.2 million in the quarter, compared with $125.4 million for the same period in 2016.
XPO’s logistics segment generated revenue of $1.46 billion for the quarter, compared with $1.35 billion for the same period in 2016.
It said the increase in logistics revenue was led by strong demand for contract logistics both in Europe and North America, partially offset by a decline in managed transportation revenue in North America. In Europe, contract logistics growth was led by e-commerce and cold chain contracts in the United Kingdom, Spain and the Netherlands. In North America, the largest gains came from the e-commerce and industrial sectors.
Operating income for the logistics segment increased to $77.4 million, compared with $75.3 million for the same period in 2016.
C.H. Robinson Worldwide Profit Falls by 7.6%
A couple of days earlier, third-party logistics provider C.H. Robinson Worldwide Inc. reported net income declined in the third quarter by 7.6% from a year earlier.
Net income totaled $119.2 million, or 85 cents per share, as total revenue improved 6.3% to $593.8 million. The per share performance beat analysts' expectations.
“The increase in total revenues was driven by increased pricing and volume growth across all of our transportation services,” the company said in a statement.
The company’s North American surface transportation segment, which includes truckload, less than truckload, and intermodal, reported income from operations slipped 11.8% to $151.4 million as revenue increased 9.6% to $2.47 billion.
Its global forwarding segment saw revenue increase 41.3% to $552.1 million and income from operations improve 82.6% to $31.1 million.
Robinson Fresh, which includes the buying, selling, and marketing of fresh fruits, vegetables, and other perishable items, saw revenue increase 3.9% to $613.6 million but income from operations plummeted 34.7% to $11.6 million.
Hub Group also Sees Revenue Climb as Profit Falls
Likewise, multi-modal freight transportation and logistics provider Hub Group Inc. reported a few days earlier an increase in revenue as profits declined as it also had to spend more to find trucks to move freight.
Third quarter net income totaled $15.3 million, or 46 cents per share, compared to third quarter 2016 net income of $17.9 million, or 54 cents per share. The latest per share performance was better than Wall Street expectations.
“Earnings for the third quarter of 2017 were negatively affected by approximately 2 cents per share related to costs and inefficiencies in the rail and dray network in areas directly affected by the hurricanes and consulting costs for a network optimization study,” the company said in a statement.
Revenue for the most recent quarter was $1,05 billion, compared with $932.8 million for the third quarter 2016.
“We are pleased with our first $1 billion dollar quarter. As capacity continues to tighten and demand accelerates, we are increasingly confident that contractual rates will strengthen over the upcoming quarters. Our intent is continued focus on improving margins by operating more efficiently, providing excellent customer service and increasing prices,” said Dave Yeager, CEO.
The Hub segment revenue increased 15% and the Mode segment revenue increased 3%. Operating income for the current quarter decreased to $21.7 million versus $29.9 million for the third quarter 2016. The Hub and Mode segments’ operating income both declined 27%.