There's a lot going on with XPO Logistics (XPO -0.54%) these days.

The transportation company just spun off its contract logistics division, GXO Logistics (GXO -1.80%), making it easier for investors to value the stock compared with less-than-truckload peers like Old Dominion and Saia. XPO also just posted record results in its second-quarter earnings report, showing the company is benefiting from the economic reopening.

In this Motley Fool Live segment recorded July 29, Fool contributor Jeremy Bowman breaks down XPO's earnings and what to expect from the spin-off.

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Jeremy Bowman: Okay. XPO Logistics, this is one of the biggest logistics and transportation and shipping companies in the world. They have three major businesses. Pretty much it's less-than-truckload, freight brokerage, and contract logistics, which is running warehouses for e-commerce companies and other consumer goods companies. They were actually one of the best performers on the S&P 500 last decade. I think they were at No. 7. They began with a roll-up strategy. CEO Brad Jacobs brought them out of pretty much a no-name company through a series of acquisitions, gaining scale, introducing new technology.

I think it's an interesting stock to watch right now because they're about to split into two companies on Monday. The contract logistics division, which they're calling GXO, is going to be a separate stock, and then XPO will keep the transportation businesses, which is primarily the less-than-truckload and freight brokerage. They also have a last mile e-commerce business, which specializes in heavy goods.

The company reported second-quarter earnings last night. Let's gets to the numbers; revenue: $5.04 billion. That was a 44% increase from last year. Of course, those numbers were depressed because of COVID, but still up 19% from 2019 at $4.24 billion. I think that shows the company is running at full speed right now.

We heard from UPS earlier in the week, which warned that e-commerce could slow down, so that spooked investors. But I think XPO feels maybe a little more diversified, or we didn't see that from them and the stock is up 4% this morning, so the market likes the report.

Adjusted EPS was $1.86, up from $1.28 in 2019, and it had an adjusted EBITDA of $507 million. Revenue and EBITDA were both quarterly records for the company. Adjusted EBITDA was nearly quarterly record. The macro environment here has been favorable for the company. Obviously, we've heard a lot about its constraints in shipping and the high demand for e-commerce. That's been favorable.

In their less-than-truckload division, they've reached a record operating ratio of 81.1%. That's the reverse of operating margins, so that's a cost number. Their operating margin was 19% in that sector, which is pretty good. Freight brokerage revenue nearly doubled in the quarter to $915 million.

One of their fastest-growing products is called XPO Connect, which is like an Uber for shippers. It connects to your company that wanted to ship, and you'd find a trucker on the platform. Not too long ago, they were just making phone calls to do this sort of thing in logistics, so that's been a big winner for the company. In logistics, their revenue was up 34% to $1.88 million, with 16% organic growth. Again, benefiting from COVID a year ago, and they also acquired their U.K. logistics operations.

One potential red flag with the company was or thing to watch, their debt burden is pretty high at about $5.3 billion. The company has said their top goal is to reduce their debt going into spin-off, but I think that's something to watch.

Why are they doing the spin-off? Basically, CEO Brad Jacobs believes that the company is trading at a conglomerate discount based on their guidance for the year, which is EBITDA of $1.875 billion to $1.915 billion. They're only trading at 7 times EBITDA. That's significantly less than LTL, less-than-truckload peers, like Saia and Old Dominion.

I think the thinking with the spin-off is that these companies will be easier to value because there will be pure-play peers to match them against, and each company will also be able to make the acquisitions and the compensation that suits them the best.

I think it'll be interesting to watch. There's a lot of growth ahead for both companies in areas like e-commerce and automation and outsourcing, so take a look on Monday, when GXO starts trading.