Q2 2024 XPO Inc Earnings Call Transcript
Key Points
- XPO Inc (XPO) reported a 9% year-over-year revenue growth to $2.1 billion in a soft market for freight transportation.
- Adjusted EBITDA increased by 41% to $343 million, and adjusted diluted EPS was up 58% year-over-year at $1.12.
- The company achieved a record low damage claims ratio of 0.2%, significantly improving from 0.7% last year.
- XPO Inc (XPO) opened 14 new service centers and plans to open 10 more in the back half of the year, enhancing network capacity and operational efficiency.
- The company reduced purchased transportation costs by 22% year-over-year through insourcing linehaul and paying lower contract rates to third-party carriers.
- Despite the positive financial results, the overall market for freight transportation remains soft and stable, with no significant growth expected in the near term.
- Labor costs increased by 11.5% year-over-year, primarily due to wage and benefit inflation as well as incentive compensation.
- Depreciation expense rose by 24% year-over-year, reflecting the company's ongoing investments in fleet and infrastructure.
- The company faces a challenging macroeconomic environment, with industrial demand remaining relatively stable but not showing significant growth.
- XPO Inc (XPO) expects a sequential increase in operating ratio (OR) by 100 to 150 basis points in the third quarter, which is in line with seasonality but indicates potential cost pressures.
Welcome to the XPO second-quarter 2024 earnings conference call and webcast. My name is Sachi. And I will be your operator for today's call. (Operator Instructions) Please note that this conference is being recorded.
Before the call begins, let me read a brief statement on behalf of the company regarding forward-looking statements and the use of non-GAAP financial measures. During this call, the company will be making certain forward-looking statements within the meaning of the applicable securities laws, which, by their nature, involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those projected in the forward-looking statements. A discussion of factors that could cause actual results to differ materially is contained in the company's SEC filings as well as in its earnings release. The forward-looking statements in the company's earnings release or made on this call are made only as of today, and the company has no obligation to update any of these forward-looking statements except to the extent required by law.
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