XPO Results Show Freight Industry is Unbothered by High Diesel Prices

Dow Jones10-29 19:12

High diesel prices and rising interest rates haven't derailed the freight economy yet.

Thursday, less-than-truckload $(LTL)$ shipper XPO reported third-quarter earnings before interest, taxes, depreciation, and amortization (Ebitda) of $433 million from sales of $2.4 billion. Wal Street was looking for $421 million from sales of $2.4 billion, according to FactSet. A year ago, XPO reported Ebitda of $342 million from sales of $2.1 billion.

LTL shippers mainly serve industrial customers that need less than a full load to move goods over relatively short distances.

Freight markets have improved. Higher pricing and volumes have boosted results.

XPO stock was up 2% in premarket trading at $185.32, while S&P 500 and Dow Jones Industrial Average futures were down 0.3% and 0.1%, respectively.

Coming into Thursday trading, XPO stock was up 34% this year, but down 9% over the past three months. Investors have started to worry that high fuel costs and interest rates will slow down the economy.

That hasn't happened yet. Both FedEx and UPS reported strong third-quarter numbers and gave strong guidance for the 2026 fourth-quarter peak shipping season.

Later on Thursday, FedEx Freight will report third-quarter numbers. Analysts project Ebitda of $461 million from sales of $2.4 billion.

FedEx Freight was spun off from FedEx in June. Investors are still getting used to the new company. Its shares trade for about 22 times earnings expected over the coming 12 months. XPO stock trades for about 28 times.

Since the spin, FedEx Freight shares have dropped 28%. XPO shares are down about 18% during that period, while the S&P 500 is up 2%.

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