On July 25, 2024, Ryder System Inc (R, Financial) released its 8-K filing for the second quarter of 2024, showcasing solid results despite challenging market conditions. Ryder System Inc operates in three business segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS).
Financial Highlights
Ryder System Inc reported GAAP earnings per share (EPS) from continuing operations of $2.83, a significant improvement from the $(0.39) reported in the prior year. The comparable EPS (non-GAAP) was $3.00, down from $3.61 in the previous year, reflecting weaker market conditions in rental and used vehicle sales, partially offset by higher earnings in contractual lease, supply chain, and dedicated businesses. Total revenue for the quarter was $3.2 billion, a 10% increase from $2.9 billion in the prior year, while operating revenue (non-GAAP) rose by 13% to $2.6 billion.
Segment Performance
Fleet Management Solutions (FMS): Total revenue increased by 1% to $1.478 billion, while operating revenue grew by 2% to $1.276 billion. Earnings before tax (EBT) for FMS decreased by 26% to $133 million, primarily due to lower used vehicle gains and weaker rental demand. However, higher ChoiceLease performance and maintenance cost-savings initiatives provided some offset.
Supply Chain Solutions (SCS): Total revenue and operating revenue both increased by 14%, reaching $1.341 billion and $989 million, respectively. EBT for SCS grew by 13% to $85 million, driven by stronger automotive performance and recent acquisitions.
Dedicated Transportation Solutions (DTS): Total revenue surged by 44% to $635 million, while operating revenue increased by 48% to $485 million. EBT for DTS rose by 10% to $37 million, reflecting improved operating performance, partially offset by costs related to the integration of the Cardinal Logistics acquisition.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Total Revenue | $3.2 billion | $2.9 billion | 10% |
| Operating Revenue (non-GAAP) | $2.6 billion | $2.3 billion | 13% |
| GAAP EPS | $2.83 | $(0.39) | N/A |
| Comparable EPS (non-GAAP) | $3.00 | $3.61 | (17%) |
CEO Commentary
"Ryder delivered solid second-quarter results and continued to outperform prior cycles," says Ryder Chairman and CEO Robert Sanchez. "Comparable EPS were above our forecast primarily reflecting better-than-expected ChoiceLease results. ROE of 16% demonstrated the increased resilience of our transformed business model and is in line with our expectations for the latter stage of a freight-cycle downturn."
Outlook
Ryder System Inc has provided a positive outlook for the full year 2024, with expectations of adjusted ROE between 16% and 16.5%, and comparable EPS (non-GAAP) ranging from $11.90 to $12.40. The company anticipates operating revenue (non-GAAP) to increase by approximately 8%, with net cash provided by operating activities from continuing operations projected at $2.4 billion and free cash flow (non-GAAP) between $150 million and $250 million.
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Explore the complete 8-K earnings release (here) from Ryder System Inc for further details.
