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Ryder System Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 24, 2012 03:22PM

Ryder System Inc. (R) filed Quarterly Report for the period ended 2012-06-30. Ryder System, Inc. has a market cap of $1.8 billion; its shares were traded at around $36.63 with a P/E ratio of 10.2 and P/S ratio of 0.3. The dividend yield of Ryder System, Inc. stocks is 3.3%. Ryder System, Inc. had an annual average earning growth of 6.7% over the past 10 years.



Highlight of Business Operations:

Earnings from continuing operations before taxes (EBT) decreased 2% in the second quarter of 2012 to $73.8 million. EBT in the second quarter of 2012 was negatively impacted by restructuring charges of $7.1 million associated with cost reduction initiatives and lower commercial rental results. EBT in the second quarter of 2012 benefited from the Hill Hire acquisition and organic growth in the SCS business segment. For the first half of 2012, EBT increased 2% to $121.5 million. The increase in EBT was primarily driven by the Hill Hire acquisition, organic growth in the SCS business segment and improved used vehicle sales results. The second quarter and first half of 2012 were negatively impacted by higher non-service pension costs. EBT in the first half of 2012 included restructuring charges of $8.0 million. Acquisitions accounted for 8% and 11% of year-over-year change in EBT in the second quarter and first half of 2012, respectively.

Excluding the special items listed above, comparable earnings and EPS from continuing operations in the second quarter of 2012 increased 7% to $51.3 million and increased 9% to $1.00 per diluted common share, respectively. Comparable earnings and EPS from continuing operations in the first half of 2012 increased 10% to $81.8 million and increased 11% to $1.59 per diluted common share, respectively. We believe that comparable earnings from continuing operations before taxes, comparable earnings from continuing operations, and comparable earnings per diluted common share from continuing operations measures, all non-GAAP financial measures, provide useful information to investors because they exclude significant items that are unrelated to our ongoing business operations.

Net earnings and EPS increased 17% in the second quarter of 2012 to $46.7 million and 18% to $0.91 per diluted common share, respectively. EPS in the second quarter of 2011 were negatively impacted by losses from discontinued operations of $0.02 per diluted share. Net earnings and EPS increased 24% in the first half of 2012 to $81.0 million and 25% to $1.58 per diluted common share, respectively. Net earnings in the second half of 2012 and 2011 were negatively impacted by losses from discontinued operations of $0.6 million, or $0.01 per diluted common share, and $1.6 million, or $0.03 per diluted common share, respectively.

SG&A expenses decreased 2% to $190.4 million in the second quarter of 2012. SG&A expenses as a percent of total revenue decreased to 12% in the second quarter of 2012. SG&A declined in the second quarter of 2012 due to lower management incentive-based compensation partially offset by higher pension expense. SG&A expenses increased 5% to $386.5 million in the first half of 2012. SG&A expenses as a percent of total revenue decreased to 12% in the first half of 2012. SG&A expenses increased in the first half of 2012 reflecting higher compensation-related expenses because of an increase in headcount from organic growth and acquisitions as well as higher commissions from new sales activity and higher pension expense. Pension expense increased $3.4 million and $7.6 million in the second quarter and first half of 2012, respectively. The increase in pension expense primarily reflects lower than expected pension asset returns in 2011 and lower assumed returns in 2012.

Our effective income tax rate from continuing operations for the six months ended June 30, 2012 was 32.8% compared with 43.7% in the same period of the prior year. The effective rate from continuing operations in the first half of 2012 was favorably impacted by a tax benefit of $5.0 million or 4.1% of earnings before tax relating to the favorable resolution of a tax item from prior periods and a higher proportionate amount of earnings in lower rate jurisdictions. The effective rate from continuing operations in the first half of 2011 was negatively impacted by tax law changes in the States of Michigan and Illinois. For the first half of 2011, these tax law changes increased our provision for income taxes by $6.6 million and our effective rate by 5.5%.

Read the The complete Report



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