When a company has lost money in the past, investors are always happy when it returns to profitability. That's the feeling that XPO Logistics (NYSE:XPO) hoped to spur today, with the logistics company looking to bounce back from a tough period in early 2016.

Coming into Wednesday's first-quarter financial report, XPO investors had high hopes that the company would succeed in getting rid of its red ink and producing at least minimum gains in sales. XPO didn't entirely meet those expectations, but even though revenue sank a bit, the logistics specialist produced much better earnings results than most had expected. Let's look more closely at XPO Logistics to see what its results can tell us about its future.

XPO truck.

Image source: XPO Logistics.

XPO Logistics keeps pushing forward

XPO Logistics' first-quarter results were mixed. Revenue fell slightly to $3.54 billion, and that was slightly worse than the minimal gain in sales from year-ago levels that most investors had wanted to see. However, net income was strong, with profit of $19.5 million reversing year-ago losses of $23.2 million. On an adjusted basis, XPO did even better, with adjusted net income of $37.9 million working out to $0.30 per share. That was double the $0.15 consensus forecast among those following the stock.

Looking more closely at the report, there were some notable differences between XPO's two main segments. The transportation business suffered a 1% sales drop, with most of the decline stemming from XPO's decision to divest its North American truckload unit late last year. Organic revenue growth stemmed from the last-mile and truck brokerage areas, while expedited and global forwarding weighed on results. Operating income jumped by a third from year-ago levels, as the less-than-truckload division in North America enjoyed huge operating margin gains.

XPO's logistics business fared even better. Revenue was up more than 3% from year-ago levels, with strength in the U.K., the Netherlands, and Italy helping to boost its European contract logistics business. Currencies held back XPO somewhat, but in North America, gains in e-commerce, food and beverage, and the industrial sector were supportive. Operating income climbed by nearly half from year-ago levels, as productivity improvements and cost reductions boosted profits.

CEO Brad Jacobs was quite happy with how things went. "We started the year on a strong note," Jacobs said, "by solidly beating our expectations for earnings and continuing to expand margins in both transportation and logistics." The CEO also noted that more efficient operations and its market-leading position in the e-commerce business are combining to make XPO a key player in the industry.

What's up next for XPO?

XPO is optimistic about its future prospects. As Jacobs pointed out, "We have a larger, more integrated sales organization feeding active bids into our $3 billion pipeline," and the company is doing a better job of using technology to help its sales team generate more leads and close more business.

What's perhaps most interesting is the balance that XPO has between its businesses in North America and in Europe. Revenue is relatively similar in both regions, but gross margin figures in Europe are quite a bit higher than they are in North America. Moreover, in Europe, full-truckload business plays the most essential role in XPO's operations. But in North America, less-than-truckload shipments make up the bulk of XPO's business. Being aware of those regional differences and being able to manage them appropriately is an essential task for the logistics company to achieve going forward.

XPO investors didn't have a big response to the news, and the stock climbed about half a percent in after-hours trading following the announcement. Yet in the long run, the company's results suggest that XPO is doing a good job of managing its business. If XPO can sustain its effectiveness in e-commerce and other high-growth areas, then the logistics provider could see even more growth in the future.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.