XPO INC (NYSE:XPO) Surpasses Q3 2025 Earnings and Revenue Estimates

XPO INC (NYSE:XPO) reported third quarter 2025 financial results that surpassed analyst expectations, delivering both revenue and earnings beats despite facing a challenging freight environment. The company's performance demonstrates resilience in its core North American less-than-truckload segment while navigating headwinds in European operations.

Earnings Performance Versus Estimates

The transportation leader posted revenue of $2.11 billion for the quarter, representing a 2.8% year-over-year increase and exceeding analyst consensus estimates of $2.09 billion. This top-line outperformance was complemented by stronger-than-expected profitability metrics.

Key quarterly financial highlights include:

• Adjusted diluted EPS of $1.07, beating estimates of $1.02 by 4.9%
• Revenue of $2.11 billion versus $2.09 billion expected
• North American LTL revenue of $1.26 billion, up 0.3% year-over-year
• European Transportation revenue of $857 million, increasing 6.7% from the prior year

The company's adjusted EBITDA reached $342 million, compared to $333 million in the same quarter last year, reflecting a 2.7% improvement. This growth occurred despite a $35 million charge related to environmental and product liability claims involving a former Con-way subsidiary, which negatively impacted GAAP earnings.

Market Reaction and Price Movement

Following the earnings release, XPO shares showed positive momentum in pre-market trading, rising approximately 1.04%. This initial reaction suggests investor approval of the company's ability to exceed expectations in what CEO Mario Harik described as a "soft freight environment." The positive pre-market movement contrasts with recent performance trends that saw the stock decline around 4.95% over the past week and 1.72% over the past month, indicating the earnings report may be catalyzing a reversal of recent negative sentiment.

Segment Performance and Operational Highlights

XPO's North American LTL segment emerged as the standout performer, demonstrating significant operational improvements despite volume challenges. The segment achieved:

• Adjusted operating income of $217 million, a 9.6% year-over-year increase
• Adjusted operating ratio improvement of 150 basis points to 82.7%
• Adjusted EBITDA of $308 million, up from $284 million in Q3 2024
• Yield growth of 5.9% excluding fuel, offsetting a 6.1% decline in tonnage per day

The European Transportation segment showed mixed results, with revenue growth of 6.7% to $857 million but adjusted EBITDA declining to $38 million from $44 million in the prior year period. The corporate segment was impacted by the one-time legal charge, contributing to an adjusted EBITDA loss of $4 million.

Forward Outlook and Analyst Expectations

While the company did not provide specific quantitative guidance in the press release, management expressed confidence in their long-term margin opportunity and expectation that "performance will accelerate as our strategy continues to gain traction." This optimistic commentary comes against the backdrop of analyst expectations for the fourth quarter, which project revenue of $1.98 billion and full-year 2025 sales of $8.14 billion.

The company's strong execution in a difficult freight market, combined with its focus on productivity improvements and yield management, positions it to potentially exceed these estimates if current trends continue. Management highlighted their eleventh consecutive quarter of sequential growth in revenue per shipment excluding fuel and emphasized their "record service quality and margin expansion at the trough of the cycle."

For detailed earnings estimates and future projections, readers can access comprehensive data through XPO's earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The content should not be interpreted as a recommendation to buy or sell any security. Readers should conduct their own research and consult with a qualified financial advisor before making investment decisions.