After successfully spinning off GXO Logistics (NYSE: GXO) last year, XPO Logistics (NYSE: XPO) is on track to run the same playbook, splitting the truck brokerage business, dubbed RXO, from the core North American less-than-truckload (LTL) business. The company sold off its intermodal business earlier this year, and plans to divest its European business ahead of the spin-off in Q4 as well, making both businesses streamlined pure plays in their respective sectors.

If there were any doubts about the overall business's performance heading into the spin-off or that the macroeconomic environment was impacting it, the latest earnings report (released last week) should put those to rest.

Revenue adjusted for the sale of its intermodal business increased 10.3% to $3.23 billion, which beat estimates at $3.17 billion. The LTL business delivered a record adjusted operating ratio of 80.4%, meaning an adjusted operating margin of 19.6%, showing how profitable the LTL business has become. It also marks a strong recovery from a year ago, when the business was struggling with equipment and labor shortages as the company ramped up trailer manufacturing and hiring through its driving school to deliver record margins in LTL.

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Source Fool.com