Most trucking companies so far this earnings reporting season are reporting big gains in profits in both the fourth quarter of last year as well as for all of 2017. This is due in large part to tax reform legislation, and numbers released Wednesday were no exception.
XPO Logistics Records $312 Million Profit
XPO Logistics Inc. reported revenue of $4.19 billion for the fourth quarter of 2017 compared with $3.68 billion for the same period in 2016. Revenue increased year-over-year by $555.2 million, excluding fourth quarter 2016 revenue of $37.9 million from the North American truckload unit divested in October 2016.
Net income was $188.5 million for the quarter, $1.42 per share, compared with net income of $27.3 million, or 22 cents per share, a year earlier.
The company said it had $169.9 million in net tax benefit related to tax reform and other tax-related adjustments.
For the full year 2017, the company reported total revenue of $15.38 billion, compared with $14.62 billion for 2016. Revenue increased year-over-year by $1.19 billion, excluding 2016 revenue of $431.9 million from the North American truckload unit divested in October 2016.
Net income was $312.4 million, or $2.45 per share, compared with $63.1 million, or 53 cents per share for 2016.
"I'm pleased that we beat fourth quarter expectations for revenue, earnings per share, adjusted EBITDA, cash flow from operations and free cash flow,” said Bradley Jacobs, chairman and CEO. “We generated outsized organic revenue growth of 10.4%, led by gains in freight brokerage, last mile and contract logistics. A strong holiday peak played directly to our strengths in e-commerce.
He said in XPO’s transportation segment, freight broker revenue increased by 33% while also increasing net revenue margin, both during the fourth quarter.
“Our North American less-than-truckload unit increased operating income by 44% year-over-year and improved its adjusted operating ratio to 89.9%, the best fourth quarter ratio in 12 years,” Jacobs said. “We expect to improve the ratio by another 100 to 200 basis points in 2018. Globally, in both transportation and logistics, we capitalized on a strong economy in every country where we operate."
More information is on the XPO website.
Forward Air Breaks $1 Billion in Revenue
Expedited ground transportation provider Forward Air Corp. reported profit nearly tripled in the fourth quarter of last year, while revenue hit a milestone for all of last year.
Net income totaled $35.3 million, or $1.18 per share, compared to net income of $12.7 million, or 42 cents per share a year earlier. Revenue improved to $306.1 million from $264.8 million.
“Our business units had mixed results during an operationally challenging fourth quarter,” said Bruce A. Campbell, chairman, president, and CEO. “Expedited less-than-truckload managed its seasonally busy quarter amid a tight truckload market to deliver strong performance despite a higher use of brokered transportation.”
He said truckload premium services also faced a higher use of brokered transportation as it began adjusting to market rates while honoring its committed customer contracts.
“Our intermodal group showed good growth while completing the integration of Atlantic and Kansas City Logistics,” Campbell said. “Pool distribution managed its peak quarter to generate revenue growth but faced higher variable costs in accommodating this volume, along with an equipment disposal charge.”
The company said its fourth quarter net income per diluted share reflects a 53-cent benefit related to tax reform passed in December. When this is excluded, net income was 65 cents per share, better than its earlier forecast of 60 to 64 cents per share.
For all of 2017, Forward Air reported net income of $87.3 million, or $2.89 per share, up sharply from a year earlier when net income totaled $27.7 million, or 90 cents per share. Revenue in 2017 was $1.1 billion, the first time it ever topped the $1 billion mark, and up from $982.5 million in 2016, according to the company.
More details are on the Forward Air website.
Echo Global Logistics Turns Around For A Profit
Lastly, Echo Global Logistics moved back into the black in the final quarter of 2017, reporting net income of $13.3 million compared to a loss of $3 million a year earlier. Revenue increased 34.6% to $547.7 million from the fourth quarter of 2016.
The company said it was helped by a nearly $9 million benefit from Congressional tax reform.
“This was an exciting quarter for Echo, as it marked our fastest organic revenue growth since 2010, while at the same time sequentially improving our gross margins,” said Doug Waggoner, chairman of the board and CEO. “We make significant investments in our technology and people, and I am proud to see them pay off in this dynamic freight environment.”
For all of 2017, revenue increased 13.2% to $1.9 billion from 2016 while net income increased to $12.6 million from $1.6 million.
Further information is on the Echo Global Logistics website.