XPO Adjusted EPS Jumps 59% as LTL Operating Ratio Improves 260 Basis Points

XPO's third-quarter adjusted earnings jumped 59% on Thursday as its North American less-than-truckload business grew shipments, raised yields and improved its operating ratio by 260 basis points, results the CEO said significantly outperformed seasonality.

The freight carrier reported adjusted diluted EPS of $1.70, up from $1.07 a year earlier, according to the earnings release it filed with an 8-K on Thursday. On a GAAP basis, diluted EPS was $1.53, compared with 68 cents. The year-earlier quarter included a $35 million charge related to environmental and product liability claims involving a former Con-way subsidiary.

Revenue and profit climb

Revenue rose 12.4% to $2.37 billion from $2.11 billion. Operating income increased 75.6% to $288 million, and net income more than doubled to $181 million from $82 million. Adjusted EBITDA rose 26.6% to $433 million.

"Our results show how effectively we're converting more business into higher earnings through a combination of revenue growth and margin expansion," Chairman and CEO Mario Harik said in the release.

LTL drives the gains

North American LTL revenue grew 17.4% to $1.47 billion. Yield, excluding fuel, rose 3.6% from a year earlier, shipments per day increased 5.8% and tonnage per day climbed 5.0%.

Segment adjusted operating income rose 35.0% to $293 million, and the adjusted operating ratio improved to 80.1%. In freight trucking, the operating ratio measures operating costs as a share of revenue, so a lower figure means higher profitability. Segment adjusted EBITDA increased to $389 million from $308 million, which XPO attributed to yield growth, higher tonnage, cost efficiencies and higher fuel surcharge revenue, partly offset by higher fuel costs and wage inflation.

Harik said the company is improving revenue quality with higher-margin freight, keeping its damage claims ratio below 0.2%, and expanding the use of AI across its network to operate more efficiently.

In an investor presentation filed in a separate 8-K the same morning, XPO said it has improved its LTL adjusted operating ratio by 610 basis points over three years in a historically soft freight environment.

Europe returns to profit

The European Transportation segment grew revenue 5.0% to $900 million and posted operating income of $12 million, compared with a loss of $2 million a year earlier. Segment adjusted EBITDA rose to $48 million from $38 million on higher revenue and cost efficiencies.

Cash and capital return

XPO generated $415 million of cash flow from operating activities in the quarter. It spent $123 million on net capital expenditures, repurchased $150 million of common stock and repaid $100 million of its term loan, ending the quarter with $260 million of cash.

For the full year, the investor presentation said XPO expects total gross capital expenditures of $500 million to $600 million, interest expense of $205 million to $215 million, an adjusted effective tax rate of 23% to 24% and a diluted share count of about 118 million.

By the numbers

• $2.37 billion: third-quarter revenue, up 12.4%
• $1.70: adjusted diluted EPS, up 58.9%
• 80.1%: LTL adjusted operating ratio, 260 basis points better
• 5.8%: LTL shipments per day growth
• $150 million: third-quarter share repurchases

Sources

1. XPO Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0001104659-26-119828)
2. XPO Form 8-K furnishing third-quarter 2026 investor presentation (Item 7.01, Exhibit 99.1), filed Oct. 29, 2026 (accession 0001104659-26-119829)

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