On the eve of the spin-off of XPO Logistics’ truck brokerage division, RXO, the company has beaten analyst expectation and delivered some of its strongest quarterly results.

The company reported group-wide revenues of $3.04 bn for the quarter – although this was down on the $3.27bn reported in Q3 21 – excluding revenue from its intermodal division, which was sold in March this year, organic revenue increased 3% year on year.

Group adjusted ebitda, meanwhile, increased to $352m, compared with $307m for the same period in 2021.

Since the spin-off of contract logistics operation GXO, XPO has consisted of two main divisions – the less-than-truckload (LTL) carrier that will continue to trade as XPO Logistics, and what will, from tomorrow, be known as RXO.

LTL generated revenue of $1.2bn, compared with $1.1bn for the same period in 2021, primarily reflecting “an increase in yield”, while adjusted ebitda for the period was $258m, compared with $222m the previous year.

Meanwhile, truck brokerage (and other services) revenue was $1.92bn, down from the $2.26bn in the third quarter of 2021, largely due to the sale of the North American intermodal operation, which impacted revenue by $309m.

Brokerage adjusted ebitda was $123m, down from $131m in the same period in 2021, again due to the intermodal sale.

Truck brokerage revenue in North America was down 2%, to $686m for the third quarter, compared with $700m in 2021, which XPO said was “primarily driven by lower truckload pricing in the spot market, partially offset by a year-on-year increase in North American truck brokerage volumes, facilitated by the company’s digital brokerage platform”.

Outgoing CEO of XPO, Brad Jacobs, who is set to hand the reins of XPO Logistics to Mario Hanik and RXO to Drew Wilkerson, claimed the results left both arms ready to operate as independent companies.

He said: “Our record results in the third quarter demonstrate how strongly our North American businesses are positioned for growth as standalone companies. Both LTL and truck brokerage outperformed on key metrics leading into tomorrow’s spin-off and will thrive.

“Our plan for LTL 2.0 is showing tangible results. We reported third-quarter LTL records for revenue and adjusted ebitda. Our year-on-year tonnage accelerated every month through the quarter and inflected positive in September, with more improvement in October. Importantly, our third-quarter tonnage trend outperformed typical seasonality, bucking industry trends.

“Our truck brokerage business achieved a gross profit margin of 19% in the third quarter, with gross profit dollars up dramatically year on year, by 31%. We grew volume by 9%, decisively outpacing the industry,” he added.

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