XPO’s third quarter results exceeded expectations, with higher shipment volumes and improved pricing and operational efficiency initiatives continuing to support its financial performance.
XPO shares, trading on the New York Stock Exchange under the ticker symbol XPO, reported adjusted earnings per share of $1.70 for the period. That was 13 cents higher than analysts had expected and 63 cents higher than the same period a year earlier. Adjusted earnings excludes transaction and restructuring expenses and other items.
Consolidated revenues were $2.37 billion, up 12% year over year, but $10 million shy of analyst estimates.
LTL revenue up 17% on better shipment volumes and pricing
XPO’s less-than-truckload (LTL) operations continued to be a major contributor to the quarterly results. The segment revenue rose 17% year-over-year to $1.47 billion. Without fuel surcharges the increase was 9%.
In the quarter, diesel prices were 48% higher than a year ago, helping to explain the difference between the reported revenue growth and the growth excluding fuel surcharges.
LTL revenue increased as a consequence of higher freight volumes and improved yields. Tons were up 5% year over year, helped by a 6% increase in daily shipments and a 1% decrease in average weight per shipment.
Yield, in dollars per hundredweight, was 12 percent higher, on average. Year-over-year improvement was 4%, excluding fuel surcharges.
| XPO | Q3/26 | Q3/25 | Y/Y Gross Change | Y/Y % Change |
|---|---|---|---|---|
| LTL: | ||||
| Revenue | $1,473 | $1,255 | $218.0 | 17.4% |
| Revenue/Day | $23.0 | $19.6 | $3.4 | 17.4% |
| Revenue (ex-fuel) | $1,150 | $1,060 | $90.0 | 8.5% |
| Tonnage/Day | 34,247 | 32,618 | 1,629 | 5.0% |
| Shipments/Day | 52,988 | 50,094 | 2,894 | 5.8% |
| Revenue/Hundredweight (cwt) | $34.06 | $30.42 | $3.64 | 12.0% |
| Revenue/Hundredweight (ex-fuel) | $26.70 | $25.77 | $0.93 | 3.6% |
| Revenue/Shipment | $434.37 | $391.13 | $43.24 | 11.1% |
| Revenue/Shipment (ex fuel) | $339.12 | $330.48 | $8.64 | 2.6% |
| Pounds/Shipment | 1,293 | 1,302 | -9 | -0.7% |
| Length of Haul (miles) | 854.7 | 866.7 | -12.0 | -1.4% |
| Operating Days | 64.0 | 64.0 | 0.0 | 0.0% |
| Adjusted Operating Ratio | 80.1% | 82.7% | -260 bps | -3.1% |
| Adjusted EBITDA | $389.0 | $308.0 | $81.0 | 26.3% |
| European Transportation: | ||||
| Revenue | $900.0 | $857.0 | $43.0 | 5.0% |
| Adjusted EBITDA | $48.0 | $38.0 | $10.0 | 26.3% |
| Adjusted EBITDA margin | 5.3% | 4.5% | 80 bps | 17.8% |
| Consolidated: | ||||
| Revenue | $2,373.0 | $2,111.0 | $262.0 | 12.4% |
| Adjusted EBITDA | $433.0 | $342.0 | $91.0 | 26.6% |
| Adjusted EBITDA margin | 18.2% | 16.2% | 205 bps | 12.6% |
| Adjusted EPS | $1.70 | $1.07 | $0.63 | 58.9% |
Revenue and adjusted EBITDA in millions.
LTL adjusted OR and adjusted EBITDA exclude real estate gains on sale.
Adjusted Operating Ratio Reaches 80.1%
XPO’s LTL division recorded an adjusted operating ratio (OR) of 80.1%, an improvement of 260 basis points compared with the third quarter of the previous year.
The result also met management’s guidance, which called for an adjusted operating ratio below 81%.
Compared with the second quarter, the operating ratio deteriorated by just 20 basis points. This was a significantly better outcome than the company’s usual seasonal pattern: XPO historically experiences a deterioration of approximately 200 to 250 basis points between the second and third quarters.
Pricing actions and operational efficiency initiatives helped limit that seasonal decline, allowing the company to maintain stronger operating performance.
Freight Mix Benefits from Local Business Accounts
Changes in XPO’s customer and shipment mix also contributed to its performance. The company handled a greater proportion of freight from local small and medium-sized businesses (SMBs). These customers typically generate lighter shipments but can offer more attractive margins.
The broader manufacturing environment provided another potentially supportive factor for LTL demand. September marked the ninth consecutive month of expansion in the U.S. manufacturing sector, an important source of less-than-truckload freight.
European Transportation Revenue Increases 5%
XPO’s European transportation segment also reported year-over-year growth.
Revenue in the division rose 5% to $900 million, while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 26% to $48 million.
The improvement in adjusted EBITDA indicates that the European business also contributed to the company’s stronger quarterly performance.
Earnings Call Scheduled for Thursday
XPO planned to discuss its third-quarter results during a conference call scheduled for 8:30 a.m. Eastern Daylight Time on Thursday.
The quarterly figures provide an important reference point for the less-than-truckload market. XPO is one of the few publicly traded carriers specializing in LTL transportation, making its financial disclosures a valuable source of information in a segment where publicly available operating data remain limited.
