XPO today announced its financial results for the second quarter of 2023, reflecting solid performance in a soft industry environment for freight transportation. The company reported revenue of $1.92 billion and diluted earnings from continuing operations per share of $0.27.

Mario Harik, chief executive officer of XPO, said, “Our business performed above expectations in the second quarter, delivering adjusted EBITDA of $244 million and adjusted diluted EPS of $0.71.

“In North American LTL, we sequentially improved our adjusted operating ratio more than our forecast and operated with greater labor efficiency. Our shipments per day were higher than a year ago, driven by our quality of service, with yield growth getting stronger as the quarter progressed.

“Our momentum continued into July, when we moved more volume through our network, accelerating year-over-year growth in tonnage and shipments per day to 4% and 9%, respectively. Our yield growth also continued to improve in July, driven by our pricing initiatives.”

Harik continued, “Looking forward, we’ll continue to deliver financial and operational excellence through the disciplined execution of our LTL 2.0 plan. This includes ongoing investments in the network capacity of tractors, trailers, and doors. We remain confident in achieving our long-term targets.”

Second Quarter Highlights

For the second quarter of 2023, revenue was $1.92 billion, compared to $2.05 billion for the same period in 2022. The year-over-year reduction in revenue was due primarily to lower fuel surcharge revenue.

Net income from continuing operations attributable to common shareholders was $31 million for the second quarter of 2023, compared with $96 million for the same period in 2022. Operating income was $107 million for the second quarter, compared with $171 million for the same period in 2022. Diluted earnings from continuing operations per share was $0.27 for the second quarter, compared with $0.83 for the same period in 2022.

Adjusted net income from continuing operations attributable to common shareholders, a non-GAAP financial measure, was $83 million for the second quarter, compared with $132 million for the same period in 2022. Adjusted diluted earnings from continuing operations per share (“adjusted diluted EPS”), a non-GAAP financial measure, was $0.71 for the second quarter, compared with $1.14 for the same period in 2022.

Adjusted earnings before interest, taxes, depreciation, and amortization (“adjusted EBITDA”), a non-GAAP financial measure, was $244 million for the second quarter, compared with $289 million for the same period in 2022. The year-over-year reduction in adjusted EBITDA was due primarily to lower fuel surcharge revenue.

The company generated $131 million of cash flow from operating activities in the second quarter. Free cash flow, a non-GAAP financial measure, was $5 million, after $126 million of net capital expenditures.

Reconciliations of non-GAAP financial measures in this press release are provided in the attached financial tables.

Results by Business Segment

North American Less-Than-Truckload (LTL): The segment generated revenue of $1.14 billion for the second quarter of 2023, compared with $1.24 billion for the same period in 2022. On a year-over-year basis, shipments per day increased by 1.9%, tonnage per day decreased by 2.8%, and yield, excluding fuel, increased by 1.4%. Including fuel, yield decreased by 6.0%.

Operating income was $129 million for the second quarter of 2023, compared with $197 million for the same period in 2022. Adjusted operating ratio, a non-GAAP financial measure, was 87.6%, compared with 83.2% a year ago, reflecting a headwind of 110 basis points of incremental depreciation expense from increased capital investment in the business.

Adjusted EBITDA for the second quarter of 2023 was $208 million, compared with $274 million for the same period in 2022. The year-over-year reduction in adjusted EBITDA was due primarily to lower fuel surcharge revenue and pension income.​

European Transportation: The segment generated revenue of $781 million for the second quarter of 2023, compared with $807 million for the same period in 2022.

Operating income was $12 million for the second quarter of 2023, compared with $15 million for the same period in 2022. Adjusted EBITDA was $46 million for the second quarter of 2023, compared with $49 million for the same period in 2022.