Stocks & Financial News
Breaking financial news 24/7 courtesy of TradingCharts.com Inc. / TFC Commodity Charts
Ryder Reports First Quarter 2024 Results
--Full-Year 2024 Forecast
Ryder System, Inc. (NYSE: R), a leader in supply chain, dedicated transportation, and fleet management solutions, reported results for the three months ended March 31 as follows:
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240423661437/en/
(In millions, except EPS) Earnings Earnings Diluted
Before Taxes Earnings
Per Share
------------------------------ ---------------------------- ------------------------------
2024 2023 2024 2023 2024 2023
------ ---- ---- ---- ------ ----
Continuing operations (GAAP) $ 114 201 $ 85 140 $ 1.89 2.95
Total and operating revenue for the three months ended March 31 were as follows:
(In millions) Total Revenue Operating Revenue
(non-GAAP)
---------------------------------------------------------- ----------------------------------------------------------
2024 2023 Change 2024 2023 Change
------- ----- ------ ------- ----- ------
Total $ 3,098 2,952 5% $ 2,495 2,346 6%
Fleet Management Solutions (FMS) $ 1,455 1,503 (3)% $ 1,251 1,262 (1)%
Supply Chain Solutions (SCS) $ 1,302 1,201 8% $ 972 879 11%
CEO Comment
"Ryder delivered solid first-quarter results amid a challenging freight environment by continuing to execute on our balanced growth strategy," says Ryder Chairman and CEO Robert Sanchez. "The outperformance in the quarter was driven by better-than-expected used vehicle results and benefits from our ongoing maintenance cost savings initiative. The actions we've taken to de-risk the model, enhance returns, and drive profitable growth are delivering improved results relative to prior cycles. ROE was 17% and in line with our target, reflecting the transformation of our business model and increased resiliency.
"We remain focused on profitable growth of our contractual lease, supply chain, and dedicated businesses as part of our balanced growth strategy. Higher ChoiceLease results and our maintenance cost saving initiative benefited FMS results. Strong automotive performance as well as earnings from recent acquisitions benefited SCS. In DTS, integration of the Cardinal acquisition is on track and we expect to achieve planned synergies.
"Our strong balance sheet continues to provide us with capacity to fund organic growth, share repurchases, and strategic acquisitions.
"Throughout the current freight cycle downturn, our transformed business model has consistently outperformed prior cycles. We remain confident that the changes we've made to the business will continue to generate higher highs and higher lows while positioning us to benefit from the cycle upturn."
First Quarter 2024 Segment Review
Fleet Management Solutions: Earnings Reflect Weaker Market Conditions in Used Vehicle Sales and Rental, Partially Offset by ChoiceLease Results
1Q24 1Q23 Change
(In millions)
------------------------------------- -------------------------------- ------------------------------ --------------------
$ 1,455 1,503 (3)%
Total Revenue
$ 1,251 1,262 (1)%
Operating Revenue (1)
$ 100 182 (45)%
Earnings Before Tax (EBT)
====== ====== ==================== ========== ====================
6.9% 12.1% (520) bps
EBT as a % of total revenue
================================ ==============================
8.0% 14.4% (640) bps
EBT as a % of operating revenue (1)
================================ ==============================
------------------------------------- -------------------- -------------------------------- -------------------- ------------------------------ -------------------- --------------------
FMS total revenue and operating revenue decreased 3% and 1%, respectively Total revenue reflects lower fuel costs passed through to customers and lower operating revenue Operating revenue reflects lower commercial rental revenue, largely offset by higher ChoiceLease revenue FMS EBT of $100 million Reflects lower used vehicle pricing compared to elevated levels in the prior year as well as weaker rental demand, partially offset by higher ChoiceLease results and maintenance cost savings initiatives Lower used vehicle gains reflect decreases in used truck and tractor pricing of 30% and 34%, respectively, partially offset by higher volumes; sequentially from fourth quarter of 2023, used truck and tractor pricing decreased 3% and 4%, respectively Rental power-fleet utilization was 66%, down from 75% in prior year on a 13% smaller average power fleet
Supply Chain Solutions: Earnings Reflect Better Operating Performance; Prior Year Impacted by Impairment Charge
1Q24 1Q23 Change
(In millions)
------------------------------------- -------------------------------- ------------------------------ --------------------
$ 1,302 1,201 8%
Total Revenue
$ 972 879 11%
Operating Revenue (1)
$ 64 17 267%
Earnings Before Tax (EBT)
====== ====== ==================== ========== ====================
4.9% 1.4% 350 bps
EBT as a % of total revenue
================================ ==============================
6.6% 1.9% 470 bps
EBT as a % of operating revenue (1)
================================ ==============================
------------------------------------- -------------------- -------------------------------- -------------------- ------------------------------ -------------------- --------------------
SCS total revenue and operating revenue increased 8% and 11%, respectively Total revenue reflects increased operating revenue and higher subcontracted transportation costs passed through to customers Increase in operating revenue driven primarily by recent acquisitions SCS EBT grew to $64 million Year-over-year comparisons benefited from a prior-year $30 million asset impairment charge Results also benefited from stronger automotive performance and recent acquisitions
Dedicated Transportation Solutions: Earnings Reflect Acquisition Integration Costs
1Q24 1Q23 Change
(In millions)
------------------------------------- ---------------------------------------------- ------------------------------ --------------------
$ 563 454 24%
Total Revenue
$ 427 322 33%
Operating Revenue (1)
$ 18 29 (38)%
Earnings Before Tax (EBT)
==================== ====== ==================== ========== ====================
3.2% 6.4% (320) bps
EBT as a % of total revenue
==================== ========================== ==============================
4.2% 9.0% (480) bps
EBT as a % of operating revenue (1)
==================== ========================== ==============================
------------------------------------- -------------------- ---------------------------------------------- -------------------- ------------------------------ -------------------- --------------------
DTS total revenue increased 24% and operating revenue grew 33% Total and operating revenue increased due to the Cardinal Logistics acquisition DTS EBT of $18 million Decrease due to Cardinal Logistics' acquisition integration and other related costs, as well as higher insurance costs
Corporate Financial Information
Capital Expenditures, Cash Flow, and Leverage
First-quarter capital expenditures decreased to $716 million in 2024, compared to $802 million in 2023, primarily reflecting lower investments in commercial rental.
First-quarter net cash provided by operating activities from continuing operations was $526 million compared to $478 million in 2023, primarily reflecting lower working capital needs. Free cash flow (non-GAAP) of $13 million, compared to $101 million in 2023, reflects lower proceeds from sales of property and revenue-earning equipment.
Debt-to-equity as of March 31, 2024 was 246%, compared to 232% at year-end 2023, and remains below the company's long-term target of 250% to 300%.
Outlook
"As we look ahead, we are focused on the successful integration of our recent acquisitions and executing on our asset management playbook through this challenging freight environment," says Ryder Chief Financial Officer John Diez. "We are raising the lower end of our full-year forecast to reflect the outperformance in the quarter, partially offset by a more modest rental upturn than initially expected. We are also raising our free cash flow forecast and reducing our rental capital spending forecast by $100 million to align with this revised outlook."
Full Year 2024
--------------------
Total Revenue Growth 10%
Operating Revenue Growth (non-GAAP) 10%
FY24 GAAP EPS $10.95 - $11.70
FY24 Comparable EPS (non-GAAP) $11.75 - $12.50
Adjusted ROE (1) 15.5% - 16.5%
Net Cash from Operating Activities from Continuing Operations $2.4B
Free Cash Flow (non-GAAP) $(175) - $(275)M
Capital Expenditures $3.2B
Debt-to-Equity 240%
Second Quarter 2024
--------------------
2Q24 GAAP EPS $2.58 - $2.78
2Q24 Comparable EPS (non-GAAP) $2.75 - $2.95
------------------------
Supplemental Company Information
First Quarter Net Earnings
(In millions, except EPS) Earnings Diluted EPS
----------------------------------- ----------------------------------------------------------------------------- -------------------------------------------------------------------------------
2024 2023 2024 2023
---------------------------------- ----------------------- ---------------------------------- -------------------------
Earnings from continuing operations $ 85 140 $ 1.89 2.95
Discontinued operations -- (1 ) -- (0.01 )
-------------------- -------------- --- -------------------- -------------------- -------------- ----- --------------------
Business Description
Ryder System, Inc. is a leading supply chain, dedicated transportation, and fleet management solutions company. Ryder's stock (NYSE: R) is a component of the Dow Jones Transportation Average and the S&P MidCap 400(R) index. The company's financial performance is reported in the following three, inter-related business segments:
Supply Chain Solutions - Ryder's SCS business segment optimizes logistics networks to make them more responsive and able to be leveraged as a competitive advantage. Globally-recognized brands in the automotive, consumer goods, food and beverage, healthcare, industrial, oil and gas, technology, and retail industries rely on Ryder's leading-edge technologies and world-class logistics engineers to help them deliver the goods that consumers use every day. Dedicated Transportation Solutions - Ryder's DTS business segment combines the best of Ryder's leasing and maintenance capabilities with the safest and most professional drivers in the industry. With a dedicated transportation solution, Ryder helps customers increase their competitive position, reduce risk, and integrate their transportation needs with their overall supply chain. Fleet Management Solutions - Ryder's FMS business segment provides a broad range of services to help businesses of all sizes, across virtually every industry, deliver for their customers. From leasing, maintenance, and fueling, to rental and used vehicle sales, customers rely on Ryder's expertise to help them lower their costs, redirect capital to other parts of their business, and focus on what they do best - so they can grow.
For more information on Ryder System, Inc., visit investors.ryder.com and ryder.com.
Note: Regarding Forward-Looking Statements
Certain statements and information included in this news release are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995, including: our forecast; our outlook; our expectations regarding market trends and economic environment, such as rental demand, economic growth, challenging freight environment, weakening used vehicle sales and rental, and declining volumes in our omnichannel retail vertical; our expectations regarding the freight cycle, including timing and the impact of the freight cycle on our businesses; our expectations regarding total and operating revenue, earnings per share, comparable earnings per share, adjusted ROE, earnings before income tax, net cash from operating activities from continuing operations, debt-to-equity, capital expenditures, operating cash flow and free cash flow, and the causes of change; our ability to execute our balanced growth strategy; the impact of inflationary pressures, such as inflationary cost recovery; our expectations regarding commercial rental demand and utilization and used vehicle sales volume and pricing; our expectations regarding long-term profitable growth and secular growth trends; our expectations with respect to our actions to increase returns and create long-term value; our expectations regarding used vehicle inventory and fleet size; our ability to outperform prior cycles; our ability to support organic growth, including growing our contractual lease, dedicated, and supply chain businesses at targeted returns; our expectations regarding strategic investments and acquisitions, including the acquisitions of Cardinal Logistics and Impact Fulfillment Services; and our expectations regarding our ability to return capital to shareholders, including through share repurchases and dividends. Our forward-looking statements also include our estimates of the impact of residual value estimates on earnings and depreciation expense that is based in part on our current assessment of the residual values and useful lives of revenue-earning equipment based on multi-year trends and our outlook for the expected near- and long-term used vehicle market. A variety of factors, many of which are outside of our control, could cause residual value estimates to differ from actual used vehicle sales pricing, such as changes in supply and demand of used vehicles; volatility in market conditions; changes in vehicle technology; competitor pricing; regulatory requirements; driver shortages; customer requirements and preferences; and changes in underlying assumption factors.
All of our forward-looking statements should be evaluated by considering the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Important factors that could cause such differences include: changes in general economic and financial conditions in the U.S. and worldwide; the ongoing supply chain and labor challenges and vehicle production constraints, including original equipment manufacturer delays; the effect of geopolitical events; our ability to adapt to changing market conditions, including lower than expected contractual sales, decreases in commercial rental demand or utilization, poor acceptance of rental pricing, declining market demand for or excess supply of used vehicles impacting current or estimated pricing, and our anticipated proportion of retail versus wholesale sales; declining customer demand for our services; higher than expected maintenance costs; lower than expected benefits from our cost-savings initiatives; our ability to effectively and efficiently integrate acquisitions into our business; lower than expected benefits from our sales, marketing, and new product initiatives; setbacks in the economic market or in our ability to retain profitable customer accounts; impact of changing laws and regulations; difficulty in obtaining adequate profit margins for our services; inability to maintain current pricing levels due to, for example, economic conditions, business interruptions, expenditures, labor disputes, and severe weather or other natural occurrences; competition from other service providers; changes in technology and new entrants; professional driver and technician shortages resulting in higher procurement costs and turnover rates; impact of supply chain disruptions; higher than expected bad debt reserves or write-offs; decrease in credit ratings; increased debt costs; adequacy of accounting estimates; our ability to effectively and efficiently integrate acquisitions into our business; higher than expected reserves and accruals particularly with respect to pension, taxes, insurance, and revenue; impact of changes in our residual value estimates and accounting policies, including our depreciation policy; unanticipated changes in fuel and alternative energy prices; unanticipated currency exchange rate fluctuations; fluctuations in inflation or interest rates; our ability to manage our cost structure; and the risks described in our filings with the Securities and Exchange Commission (SEC). The risks included here are not exhaustive. New risks emerge from time to time, and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Note: Regarding Non-GAAP Financial Measures
This news release includes certain non-GAAP financial measures as defined under SEC rules. Refer to Appendix - Non-GAAP Financial Measure Reconciliations at the end of the tables following this press release for reconciliations of the most comparable GAAP measure to the non-GAAP financial measure and the reasons why management believes the measure is important to investors. Additional information regarding non-GAAP financial measures as required by Regulation G and Item 10(e) of Regulation S-K can be found in our most recent Form 10-K, Form 10-Q, and Form 8-K filed with the SEC as of the date of this release, which are available at investors.ryder.com.
CONFERENCE CALL AND WEBCAST INFORMATION
Ryder's earnings conference call and webcast is scheduled for April 23, 2024 at 11:00 a.m. ET. To join, click here.
LIVE AUDIO VIA PHONE Toll Free Number: 888-394-8218 USA Toll Number: 323-994-2093 Audio Passcode: Ryder Conference Leader: Calene Candela
WEBCAST REPLAY
An audio replay including the slide presentation will be available within four hours following the call. Click here then select Financials/Quarterly Results and the date.
ryder-financial
RYDER SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
Three months ended March 31,
------------------------------------------------------------------------------------------------------------------------
(In millions, except per share amounts) 2024 2023
----------------------------------------------------------------- ------------------------------------------------------------ ----------------------------------------
Services revenue $ 2,038 1,821
Lease & related maintenance and rental revenues 936 979
Fuel services revenue 124 152
-------------------- -------------------- -------------------- -------------------- --------------------
3,098 2,952
Total revenues
-------------------- -------------------- -------------------- -------------------- --------------------
Cost of services 1,743 1,607
Cost of lease & related maintenance and rental 669 674
Cost of fuel services 121 149
Selling, general and administrative expenses 378 363
Non-operating pension costs, net 11 10
Used vehicle sales, net (20 ) (72 )
Interest expense 92 65
Miscellaneous income, net (15 ) (20 )
Restructuring and other items, net 5 (25 )
-------------------- -------------------- -------------------- -------------------- --------------------
2,984 2,751
-------------------- -------------------- -------------------- -------------------- --------------------
Earnings from continuing operations before income taxes 114 201
Provision for income taxes 29 61
-------------------- -------------------- -------------------- -------------------- --------------------
85 140
Earnings from continuing operations
Loss from discontinued operations, net of tax -- (1 )
-------------------- -------------------- -------------------- -------------------- --------------------
$ 85 139
Net earnings
==================== ==================== ==================== ==================== ====================
Earnings (loss) per common share -- Diluted
$ 1.89 2.95
Continuing operations
-- (0.01 )
Discontinued operations
-------------------- -------------------- -------------------- -------------------- --------------------
$ 1.89 2.94
Net earnings
==================== ==================== ==================== ==================== ====================
Weighted average common shares outstanding -- Diluted 45.0 47.5
==================== ==================== ==================== ==================== ====================
$ 1.89 2.95
Diluted EPS from continuing operations
0.17 0.17
Non-operating pension costs, net
0.09 --
Acquisition costs
-- (0.30 )
FMS U.K. exit
(0.01 ) (0.01 )
Other, net
$ 2.14 2.81
Comparable EPS from continuing operations (1)
==================== ==================== ==================== ==================== ====================
-----------------------------------------------------------------
(1) Non-GAAP financial measure. A reconciliation of GAAP EPS from continuing operations to comparable EPS from continuing operations is set forth in this table.
RYDER SYSTEM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In millions) March 31, December 31,
2024 2023
----------------------------------------------------------------- ------------------------------ --------------------
Assets:
$ 234 204
Cash and cash equivalents
2,172 2,061
Other current assets
8,977 8,892
Revenue earning equipment, net
1,232 1,217
Operating property and equipment, net
3,866 3,404
Other assets
-------------------- ---------- --------------------
$ 16,481 15,778
==================== ========== ====================
Liabilities and shareholders' equity:
$ 2,177 2,066
Current liabilities
7,543 7,114
Total debt (including current portion)
3,696 3,529
Other non-current liabilities (including deferred income taxes)
3,065 3,069
Shareholders' equity
-------------------- ---------- --------------------
SELECTED KEY RATIOS AND METRICS
March 31, December 31,
2024 2023
-------------------- --------------------
Three months ended March 31,
------------------------------------------------------------------------
(In millions) 2024 2023
--------------------- ---------------------------- ------------------------
Comparable EBITDA (1) $ 636 628
Three months ended March 31,
------------------------------------------------------
(In millions) 2024 2023
-------------------------------------------------------------------- --------------------------- -------
Net cash provided by operating activities from continuing operations $ 526 478
Free cash flow (1) 13 101
Capital expenditures paid 686 641
Twelve months ended March 31,
------------------------------------------------------------------------------------------------------------------------------------
2024 2023
---------------------------------------------------------------- ----
Adjusted ROE (2) 17% 27%
------------------------
(1) Non-GAAP financial measure. See reconciliation of the non-GAAP elements of this calculation reconciled to the corresponding GAAP measures included in the Appendix - Non-GAAP Financial Measures section at the end of this release.
(2) The non-GAAP elements of the calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of net earnings to adjusted net earnings and average shareholders' equity to adjusted average equity is provided in the Appendix - Non-GAAP Financial Measures section at the end of this release.
RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED
Three months ended March 31,
----------------------------------------------------------------------------------------------------------------------------------------------------------
(In millions) 2024 2023 Change
------------------------------------------------------------------------------------------------------------------------------------------------------------------------ --------------------------------------------------------- ------------------------------------- --------------------
Total Revenue:
Fleet Management Solutions:
$ 842 776 9%
ChoiceLease
231 304 (24)%
Commercial rental
178 182 (2)%
SelectCare and other
204 241 (15)%
Fuel services revenue
-------------------- ----------------- -------------------- ----------------- --------------------
Fleet Management Solutions 1,455 1,503 (3)%
Supply Chain Solutions 1,302 1,201 8%
Dedicated Transportation Solutions 563 454 24%
Eliminations (222 ) (206 ) (8)%
-------------------- ----------------- -------------------- ----------------- --------------------
$ 3,098 2,952 5%
Total revenue
==================== ================= ==================== ================= ====================
Operating Revenue: (1)
Fleet Management Solutions $ 1,251 1,262 (1)%
Supply Chain Solutions 972 879 11%
Dedicated Transportation Solutions 427 322 33%
Eliminations (155 ) (117 ) (32)%
-------------------- ----------------- -------------------- ----------------- --------------------
$ 2,495 2,346 6%
Operating revenue
==================== ================= ==================== ================= ====================
Business Segment Earnings:
Earnings from continuing operations before income taxes:
$ 100 182 (45)%
Fleet Management Solutions
64 17 267%
Supply Chain Solutions
18 29 (38)%
Dedicated Transportation Solutions
(28 ) (25 ) 19%
Eliminations
-------------------- ----------------- -------------------- ----------------- --------------------
154 203 (24)%
(14 ) (15 ) (12)%
Unallocated Central Support Services
(11 ) (9 ) (27)%
Intangible amortization expense
(11 ) (10 ) 2%
Non-operating pension costs, net
(4 ) 32 NM
Other items impacting comparability, net
-------------------- ----------------- -------------------- ----------------- --------------------
114 201 (43)%
Earnings from continuing operations before income taxes
29 61 (52)%
Provision for income taxes
-------------------- ----------------- -------------------- ----------------- --------------------
$ 85 140 (39)%
Earnings from continuing operations
==================== ================= ==================== ================= ====================
------------------------
(1) Non-GAAP financial measure. See reconciliation of GAAP total revenue to operating revenue in the Appendix - Non-GAAP Financial Measures section at the end of this release.
RYDER SYSTEM, INC. AND SUBSIDIARIES
BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED
Three months ended March 31,
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In millions) 2024 2023 Change
------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------- -------------------------------------------------------------- -------------------------------
Fleet Management Solutions
FMS total revenue $ 1,455 1,503 (3)%
Fuel services revenue (1) (204 ) (241 ) (15)%
------------------------------- ----- ------------------------------- ------------------------------- -------------------------------
FMS operating revenue (2) $ 1,251 1,262 (1)%
=============================== ===== =============================== =============================== ===============================
Segment earnings before income taxes $ 100 182 (45)%
=============================== ===== =============================== =============================== ===============================
FMS earnings before income taxes as % of FMS total revenue 6.9% 12.1%
=================================================================== ==============================================================
FMS earnings before income taxes as % of FMS operating revenue (2) 8.0% 14.4%
=================================================================== ==============================================================
Three months ended March 31,
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2024 2023 Change
------------------------------------------------------------------- -------------------------------------------------------------- -------------------------------
Supply Chain Solutions
SCS total revenue $ 1,302 1,201 8%
Subcontracted transportation and fuel (330 ) (322 ) 3%
------------------------------- ----- ------------------------------- ------------------------------- -------------------------------
SCS operating revenue (2) $ 972 879 11%
=============================== ===== =============================== =============================== ===============================