XPO Reports Solid Q4 Earnings with Revenue in Line with Expectations

Key Financial Highlights:

* Revenue: $1.92 billion (in line with analyst estimates)
* Adjusted EPS: $0.89 (beating consensus by 41.6%)
* Adjusted EBITDA: $303 million (beating estimates by 12.9%)

Operational Performance:

* Operating margin increased to 7.7% from 6.1% last year
* Free cash flow rose to $23 million compared to -$778 million in the same quarter last year

Company Overview:

XPO (NYSE:XPO) is a transportation company specializing in expedited shipping services. It owns a mobile game simulating freight operations for the Tour de France.

Sales Growth:

* XPO's long-term sales growth is modest at 2.3% over the past two years, outpacing its five-year decline but still underwhelming.
* North American Less-Than-Truckload and European Transportation are its key revenue segments, with average growth rates of 2.9% and 1.7%, respectively.

Operating Margin:

* XPO has historically had a low operating margin of 5.1%, but it has improved to 7.7% in Q4.
* The increase indicates improved efficiency as expenses grew slower than revenue.

Earnings Per Share:

* XPO's EPS has declined by 1.3% annually over the past five years.
* However, its two-year annual EPS growth is 4.5%, driven by accelerating earnings in Q4.

Q4 Results Takeaway:

* XPO significantly exceeded analyst EPS and EBITDA estimates.
* The stock rose 1% after the earnings report.

Investment Recommendation:

While XPO had a positive quarter, one earnings result does not guarantee its long-term success. Consult the full research report for a comprehensive analysis of XPO's business quality and valuation.