XPO Inc (NYSE:XPO) reported third-quarter FY23 revenue growth of 1.7% year-over-year to $1.98 billion, beating the consensus of $1.93 billion.

The increase in revenue was due to higher tonnage per day and yield, excluding fuel, in the North American LTL segment.

Adjusted EPS was $0.88, down from $0.95 in 3Q22, beating the consensus of $0.63.

Q3 operating income was $154 million, compared with $139 million a year ago, and the margin expanded by 63 bps to 7.8%.

North American Less-Than-Truckload revenue was $1.23 billion (+1.9% Y/Y). Adjusted operating ratio was 86.2% versus 85.6% in 3Q22. The segment's EBITDA margin contracted by 30 bps to 19.6%.

The segment's shipments per day increased 7.8 % Y/Y, tonnage per day increased 3.1% Y/Y, and yield, excluding fuel, rose 6.4%.

European Transportation generated revenue of $752 million (+1.5% Y/Y), and the Adjusted EBITDA margin was 5.8%, down by 10 bps. Adjusted operating income declined 11.8% Y/Y to $15 million.

The company's Adjusted EBITDA increased 6.1% Y/Y to $278 million in the quarter, and the margin expanded by 60 bps to 14%.

The company generated $236 million of cash flow from operating activities and ended the quarter with $335 million of cash and cash equivalents in hand.

The damage claims ratio for the company was 0.4% — a significant improvement from 1.2% two years ago.

"We also captured more share in the quarter, as customers responded to our focus on service and investments in capacity. Our yield growth, excluding fuel, accelerated to 6.4%, reflecting the benefit of numerous pricing initiatives underway. We expect to further accelerate yield growth in the fourth quarter," CEO Mario Harik stated.

Price Action: XPO shares are trading higher by 7.23% at $72.20 premarket on Monday.