Ryder System Inc (R) Q1 2024 Earnings: Solid Performance Amid Market Challenges

GuruFocus Research

April 23, 2024 at 8:11 a.m.·4 min read

GAAP EPS from continuing operations: $1.89, down from $2.95 the previous year, falling short of estimates of $1.71.
Comparable EPS (non-GAAP) from continuing operations: $2.14, down from $2.81 in the prior year, exceeding estimates of $1.71.
Total Revenue: $3.1 billion, up from $3.0 billion in the previous year, surpassing estimates of $3062.16 million.
Operating Revenue (non-GAAP): $2.5 billion, an increase of 6%, driven by recent acquisitions and contractual revenue growth.
Net Income from Continuing Operations (GAAP): $85 million, down from $140 million in the prior year.
Supply Chain Solutions (SCS) Revenue: $1.302 billion, up 8% year-over-year, with operating revenue up 11% due to strong automotive performance and recent acquisitions.
Dedicated Transportation Solutions (DTS) Revenue: $563 million, up 24% year-over-year, with operating revenue up 33%, reflecting the integration of the Cardinal acquisition.

Warning! GuruFocus has detected 6 Warning Signs with R.

Ryder System Inc (NYSE:R) has released its first-quarter earnings for 2024, showcasing a resilient performance in a challenging market. The company reported on April 23, 2024, through its 8-K filing, a mix of achievements and setbacks influenced by the current economic environment.

Company Overview

Ryder System Inc operates through three primary segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS). These segments collectively provide comprehensive logistics and transportation solutions, including leasing, maintenance, and dedicated transportation services to various industries.

Financial Highlights and Analyst Expectations

For Q1 2024, Ryder reported a GAAP EPS from continuing operations of $1.89, down from $2.95 in the previous year, and a non-GAAP comparable EPS of $2.14, compared to $2.81 a year ago. These figures reflect weaker conditions in used vehicle sales and rental, though partially offset by stronger performance in Supply Chain Solutions and ChoiceLease results. Total revenue increased to $3.1 billion from $3.0 billion in the prior year, aligning closely with analyst expectations of $3.06 billion.

The company's operating revenue also saw a 6% increase to $2.5 billion, driven by recent acquisitions and contractual revenue growth, despite a dip in commercial rental revenue in the Fleet Management Solutions segment.

Segment Performance

The FMS segment experienced a decline in total and operating revenue by 3% and 1% respectively, primarily due to lower fuel costs passed to customers and decreased commercial rental revenue. However, this was somewhat mitigated by higher ChoiceLease revenue. The SCS segment, on the other hand, showed robust growth with an 8% increase in total revenue and an 11% rise in operating revenue, attributed to strong automotive performance and recent acquisitions. The DTS segment reported a significant 24% increase in total revenue and 33% in operating revenue, mainly due to the successful integration of the Cardinal Logistics acquisition.

Outlook and Strategic Moves

Ryder's management remains optimistic about the company's strategic direction, emphasizing a focus on profitable growth and operational efficiency. The company has raised its full-year 2024 forecast, now expecting a comparable EPS in the range of $11.75 to $12.50, slightly above analyst expectations of $11.70. This adjustment reflects the solid performance in the first quarter and ongoing initiatives to enhance returns and drive growth.

CEO Robert Sanchez highlighted the company's resilience amidst a challenging freight environment, crediting the better-than-expected used vehicle results and benefits from ongoing maintenance cost savings initiatives for the quarter's performance. He also noted the transformation of the business model, which has increased its resiliency and positioned Ryder to benefit from future market upturns.

Financial Stability and Future Investments

Ryder continues to maintain a strong balance sheet, providing the capacity to fund organic growth, share repurchases, and strategic acquisitions. The company reported a first-quarter capital expenditure of $716 million, down from $802 million in the previous year, reflecting lower investments in commercial rental. Net cash provided by operating activities was $526 million, up from $478 million in 2023, indicating efficient capital management and operational effectiveness.

In conclusion, Ryder System Inc's first-quarter results for 2024 demonstrate a solid performance amidst market adversities, with strategic adjustments and operational efficiencies helping to offset challenges in vehicle sales and rentals. The company's proactive management and revised forecasts suggest a positive outlook for the remainder of the year.

Explore the complete 8-K earnings release (here) from Ryder System Inc for further details.

This article first appeared on GuruFocus.

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Company Overview

Financial Highlights and Analyst Expectations

Segment Performance

Outlook and Strategic Moves

Financial Stability and Future Investments

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