MIAMI - Ryder System, Inc. (NYSE: NYSE:R), a leader in supply chain, dedicated transportation, and fleet management solutions, reported a first-quarter earnings beat despite facing weaker market conditions in used vehicle sales and rental. The stock was up 0.92% in premarket trading
The company announced an adjusted EPS of $2.14, a decline from the previous year's $2.81 but surpassing the analyst estimate of $1.71. This beat was partially offset by stronger results in the Supply Chain Solutions (SCS) and ChoiceLease segments.
For the quarter ending March 31, 2024, Ryder's total revenue increased to $3.1 billion, up from $3.0 billion in the prior year, aligning with the consensus estimate of $3.13 billion. Operating revenue, a non-GAAP measure that excludes fuel and subcontracted transportation, rose by 6% to $2.5 billion, reflecting recent acquisitions and contractual revenue growth, despite lower commercial rental revenue in Fleet Management Solutions (FMS).
Ryder's Chairman and CEO Robert Sanchez commented on the quarter's performance, attributing the solid results to the company's balanced growth strategy and better-than-expected used vehicle results, alongside benefits from ongoing maintenance cost savings initiatives. Sanchez highlighted the resilience of Ryder's transformed business model, which delivered a return on equity (ROE) of 17%, in line with the company's target.
Looking ahead, Ryder raised its full-year 2024 forecast, expecting an adjusted EPS range of $11.75 to $12.50, with operating revenue anticipated to grow by approximately 10%. The company also projects net cash provided by operating activities from continuing operations to be around $2.4 billion, with free cash flow estimated to be negative between $175 million and $275 million.
The company's CFO, John Diez, expressed confidence in Ryder's ability to navigate the challenging freight environment, noting the upward revision of the full-year forecast to reflect the quarter's outperformance, balanced against a more modest rental upturn than initially expected. Diez also mentioned the reduction in rental capital spending by $100 million to align with the revised outlook.
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