GREENWICH, Conn. – XPO Logistics announced second-quarter 2020 revenue of $3.5 billion. While a 17.4% decrease compared with the same period last year, the global supply chain services provider surpassed analyst’s estimates for second-quarter revenue by 4.1%.
XPO’s second-quarter net loss attributable to common shareholders of $132 million for the quarter, or a diluted loss per share of $1.45, compared with net income attributable to common shareholders of $122 million, or diluted earnings per share of $1.19, for the same period in 2019.
Last-mile delivery of heavy goods was a second-quarter bright spot, with a 3% year-over-year revenue increase and net revenue dollars up 11%.
XPO’s transportation segment generated second-quarter revenue of $2.13 billion, down 22.5% compared with the same period last year. The decrease in revenue primarily reflects the impact of COVID-19.
Transportation had an operating loss of $15 million in the second quarter, compared with operating income of $243 million for the same period in 2019. XPO attributed the operating loss to the decrease in segment revenue and to costs related to the terminated exploration of strategic alternatives and COVID-19-related costs.
Second-quarter logistics segment revenue of $1.4 billion was down 8.5% from the same period last year, primarily a reflection of the impact of COVID-19 and the company’s elimination of certain low-margin business.
Second quarter 2020 operating loss for the logistics segment was $43 million, compared with operating income of $61 million for the same period in 2019. The operating loss is primarily related to the decrease in segment revenue, an increase in depreciation and amortization expense, costs related to the company’s terminated exploration of strategic alternatives, restructuring-related expenses and COVID-19-related costs, partially offset by a reduction in temporary labor costs.
“The ramifications of COVID-19 dominated the second quarter,” said XPO Chairman and CEO Bradley Jacobs in a release. “Nevertheless, we beat expectations on revenue, adjusted EBITDA and adjusted EPS, and generated notably high cash flow from operations of $214 million and free cash flow of $121 million. Business trends improved across our segments and geographies as the quarter progressed and continued in July.
“We’ve seen a recovery take hold in Europe and start in North America,” he continued. “E-commerce continues to be our strongest tailwind, benefitting contract logistics and last mile. Our last-mile network in North America generated year-over-year revenue growth of 3% in the quarter, with a net revenue margin of 37%.”
XPO continued to maintain a strong liquidity position coming out of the second quarter. As of June 30, the company had approximately $2.8 billion of total liquidity, including $2.3 billion of cash and cash equivalents and $500 million of available borrowing capacity. In the second quarter 2020, the company issued $1.15 billion of 6.25% senior notes maturing in 2025 and added a new $350 million term loan and letter of credit facility.
Through 2020’s first six months, XPO’s revenue of $7.4 billion is off 11.9% compared with 2019’s first two quarters. Comparing the same two periods, XPO had a year-to-date loss attributable to shareholders of $108 million this year vs. income of $182 million in 2019’s first half.
Looking ahead based on current market conditions, XPO expects to generate at least $350 million of adjusted EBITDA in the third quarter 2020. The company previously withdrew its full-year guidance in April due to the COVID-19 pandemic.