Nov 1 (Reuters) - XPO Logistics Inc posted a record quarterly profit on Wednesday, fueled by e-commerce demand for its contract logistics and “last mile” services, shipments of consumer goods, and a strong truck brokerage market.
The third-largest publicly traded U.S. logistics company also reaffirmed its full-year forecasts for adjusted pre-tax earnings of at least $1.37 billion in 2017 and $1.6 billion in 2018, and its appetite for rapid-fire acquisitions.
“We generated the highest revenue, net income and cash flow of any quarter in our history,” CEO Brad Jacobs told Reuters in a telephone interview.
XPO is a big player in e-commerce deliveries through its contract logistics and “last-mile” services for heavy goods in North America and Europe. Jacobs said strong e-commerce trends in Europe boosted revenue 17 percent from a year earlier.
XPO had 47 percent growth in its “omni-channel” retail business, which ships items like Crate and Barrel furniture or Home Depot Inc appliances from warehouses directly to customer homes, Jacobs said.
“Those types of big, heavy, bulk items just weren’t bought over the internet five, six years ago, now they are being bought increasingly so on the internet and we are the largest player in that last-mile business, and that’s helping us a lot,” he said.
The company said quarterly sales-related expenses rose to $35.8 million from $31.9 million a year earlier, as technology and recruitment costs were up.
Tight labor markets in the United States and Europe present a costly challenge for transportation companies like XPO, UPS and FedEx as they gear up for the crucial holiday delivery season this year.
Quarterly revenue in its logistics segment rose to $1.46 billion from $1.35 billion a year ago. This was partially offset by a decline in North American managed transportation sales.
Greenwich, Connecticut-based XPO reported quarterly profit of $57.5 million, or 44 cents per diluted share, compared to $13.8 million, or 11 cents per diluted share for the same period in 2016.
Adjusted for one-time items, XPO brought home $76.7 million for the quarter, or 59 cents per share, up from $49.8 million, or 41 cents a share, for the same period in 2016. Wall Street analysts expected 57 cents per share for the quarter.
Quarterly revenue rose to $3.89 billion from $3.71 billion for the same period in 2016.
XPO has used rapid-fire acquisitions of trucking outfits, warehouse operators and truck brokerages to grow from a $175 million truck brokerage company in 2012 to a $14.7 billion behemoth last year.
While Jacobs declined to provide specifics on his M&A strategy for 2018, he did say XPO has a war chest of $8 billion to spend on acquisitions in the coming months and has a target list of more than a dozen companies. (Reporting by Eric M. Johnson in Seattle; Editing by David Gregorio)