XPO posts third-quarter profit, gives robust 2017 outlook

Logistics company XPO Logistics Inc on Wednesday reported a better-than-expected quarterly profit after a year-earlier loss, citing strong e-commerce demand in North America that offset the impact of lacklustre economic growth.

XPO gave a robust outlook for 2017 and its shares rose more than 4 percent after the announcement.

The Greenwich, Connecticut-based company is a provider of contract logistics, freight brokerage and global freight forwarding services to retailers, manufacturers and e-commerce companies among others.

XPO went on a buying spree in 2015. Its acquisitions included France's Norbert Dentressangle SA for $3.53 billion trucking and logistics company Con-way Inc for $3 billion, including debt.

The company said that it expects full-year 2017 EBITDA of $1.35 billion, a 17 percent increase over its expected 2016 EBITDA of $1.15 billion.

"Our profit improvement opportunities are now largely in our own hands," Chief Executive Bradley Jacobs told Reuters in a telephone interview.

He said the 2017 improvement in EBITDA would come "from company specific actions that are independent of the macro environment" such as centralized procurement, investments in technology infrastructure, savings in real estate and facilities management.

Jacobs said XPO has closed $300 million in new logistics contracts in North America this year, $175 million of which came in the third quarter, and has won 330 million euros ($366 million) in Europe for the first nine months of 2016.

XPO reported third-quarter net income of $13.8 million, or 11 cents per share, compared with a loss of $93.1 million, or 94 cents per share, a year earlier. Excluding one-time items, XPO reported earnings of 41 cents per share.

Analysts had on average expected earnings per share of 37 cents.

The company reported charges for the quarter related to a debt refinancing, plus transaction and branding costs.

Revenue in the quarter rose more than 50 percent to $3.7 billion from $2.4 billion, reflecting the addition of last year's acquisitions. Jacobs said the company's "organic" revenue growth was 7 percent versus the third quarter of 2015.

In after-market trading XPO's shares were up 4.2 percent at $34.