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XPO Logistics Inc XPO

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Morningstar’s Analysis

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Exceptional Freight-Demand Backdrop Drives XPO’s Good First-Quarter Performance

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

XPO Logistics’ first-quarter gross revenue rose 24% year over year (above our forecast) on excellent demand and pricing conditions for the LTL trucking, freight brokerage, and contract logistics operations. Freight-volume strength stems from heavy retailer restocking, robust consumer goods spending, and recovering industrial end markets. At the same time, extremely tight trucking-market capacity is supporting solid gains for LTL yields and truck brokerage sell rates.

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Company Profile

Business Description

XPO Logistics is a diversified trucking and logistics company. Acquisitions have contributed meaningfully to the firm's current profile. Ignoring the upcoming contract-logistics segment spin-off, roughly 62% of XPO's total gross revenue comes from transportation operations, including asset-light truck brokerage, intermodal, last mile, and global forwarding, as well as asset-based less-than-truckload shipping. Its global contract logistics division (outsourced warehousing and supply-chain services), which has a large presence in Europe, constitutes about 38% of sales.Within its transportation segment, XPO's two largest service offerings are LTL trucking (35% of segment gross revenue) and freight brokerage (27%).

Contact
Five American Lane
Greenwich, CT, 06831
T +1 855 976-6951
Sector Industrials
Industry Integrated Freight & Logistics
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 108,000