XPO Announces Q4 and Full-Year 2024 Financial Results
XPO (NYSE: XPO) has announced its financial results for the fourth quarter of 2024, demonstrating strong performance and growth across key financial metrics. The company’s reported diluted earnings from continuing operations per share reached $0.63, marking an increase from $0.49 in the same period of 2023. Similarly, adjusted diluted earnings from continuing operations per share climbed to $0.89, compared with $0.77 in 2023.
For the full fiscal year of 2024, XPO reported diluted earnings from continuing operations per share of $3.23, reflecting a substantial rise from $1.62 in 2023. Adjusted diluted earnings from continuing operations per share also showed a positive trend, reaching $3.83 compared with $2.92 in the previous year. These results indicate a robust financial trajectory and consistent growth in the company’s earnings power.
CEO Commentary
Mario Harik, XPO’s Chief Executive Officer, expressed satisfaction with the company’s fourth-quarter results, highlighting the organization’s ability to achieve sustained earnings growth. “We’re pleased to report a strong fourth quarter that caps a year of above-market earnings growth,” Harik stated. “Companywide, we delivered full-year increases of 27% in adjusted EBITDA and 31% in adjusted diluted EPS, compared with the prior year.”
A significant contributor to this success was XPO’s North American Less-Than-Truckload (LTL) business, which exceeded full-year expectations. The segment saw a 27% increase in adjusted operating income and improved its adjusted operating ratio by 260 basis points. This was accomplished while integrating 25 new service centers into the company’s network.
Harik underscored that service levels reached record highs, leading to a 7.8% rise in yield (excluding fuel) and a 6.8% increase in revenue per shipment. Additionally, XPO leveraged its proprietary technology to enhance labor productivity and significantly reduce outsourced linehaul miles to the lowest level in its history. These efficiencies strengthened the company’s cost structure while simultaneously enhancing service quality.
Looking ahead, Harik emphasized that XPO is entering 2025 with significant momentum. “We’ve entered 2025 with strong momentum, following landmark network investments that strengthen our competitive position in a freight market recovery and for the long-term. The intense execution you see in our results will continue to deliver years of margin expansion.”
Fourth Quarter Financial Performance
XPO reported revenue of $1.92 billion for the fourth quarter of 2024, slightly down from $1.94 billion in the same period of 2023. The decrease was attributed primarily to lower fuel surcharge revenue in the North American LTL segment.
Operating income for the quarter stood at $148 million, an increase from $119 million in the fourth quarter of 2023. Net income from continuing operations reached $76 million, up from $58 million in the same quarter the previous year. Diluted earnings from continuing operations per share improved to $0.63, compared with $0.49 in the corresponding quarter of 2023.
Non-GAAP financial metrics also reflected strong performance. Adjusted net income from continuing operations was $107 million for the quarter, up from $93 million in the same period of 2023. Adjusted diluted EPS reached $0.89, surpassing the $0.77 reported for the fourth quarter of 2023.
Adjusted EBITDA stood at $303 million, benefiting from a $34 million real estate gain tied to a planned service center sale and relocation. This represented an increase from the $264 million recorded in the fourth quarter of 2023.
The company also reported strong cash flow generation, with $189 million in cash flow from operating activities for the quarter. XPO ended the quarter with $246 million in cash and cash equivalents, even after accounting for $108 million in net capital expenditures.
Business Segment Performance
North American Less-Than-Truckload (LTL)
The North American LTL segment generated revenue of $1.16 billion for the fourth quarter, a slight decline from $1.19 billion in the same period of 2023. This decrease was driven by lower shipment and tonnage volumes.
On a year-over-year basis:
- Shipments per day fell by 4.4%
- Tonnage per day declined by 5.7%
- Yield (excluding fuel) increased by 6.3%
- Including fuel, yield rose by 1.7%
Operating income for the segment was $179 million, compared with $149 million in the fourth quarter of 2023. Adjusted operating income came in at $159 million, slightly below the $160 million reported in the same period last year. The adjusted operating ratio improved to 86.2%, reflecting a 30-basis-point year-over-year improvement.
Adjusted EBITDA for North American LTL rose to $280 million, a 20% increase from $233 million in the fourth quarter of 2023. The improvement was driven primarily by real estate gains, higher yield (excluding fuel), and lower purchased transportation costs. These factors were partially offset by reduced fuel surcharge revenue and a decline in tonnage per day.
European Transportation
XPO’s European Transportation segment reported revenue of $765 million for the fourth quarter of 2024, an increase from $753 million in the same period of 2023. The revenue boost was primarily driven by pricing growth in the European market.
Despite the revenue increase, the segment posted an operating loss of $11 million, compared with a smaller loss of $2 million in the fourth quarter of 2023. Adjusted EBITDA also declined to $27 million, down from $36 million in the prior-year period, reflecting ongoing challenges in the European transportation market.
Corporate Segment
The corporate segment reported an operating loss of $19 million for the fourth quarter, a marked improvement from the $28 million loss recorded in the same period of 2023. The previous year’s loss included an $8 million litigation expense, which impacted overall results.
Adjusted EBITDA for the corporate segment showed a modest improvement, reporting a loss of $4 million compared with a $5 million loss in the fourth quarter of 2023.