Ryder System (R 56.35, +0.72) is trading higher after
reporting mixed results and raising the lower end of its earnings guidance for
the fiscal year.
The provider of truck leasing and logistics services reported below-consensus third quarter earnings of $1.64 per share on a 17.2% yr/yr jump in revenue to $2.16 bln, which was ahead of estimates.
In addition to reporting earnings, Ryder increased the lower end of its earnings guidance for the full year, expecting earnings between $5.72 per share and $5.82 per share, up from the previous forecast for earnings between $5.62 per share and $5.82 per share.
The Dow Jones Transportation Average component reported record total revenue and operating revenue with total revenue growth taking place in all three business segments. Systemwide operating revenue grew 12.6% yr/yr to $1.72 bln.
Fleet Management Solutions revenue grew 11.7% yr/yr to $1.34 bln. ChoiceLease revenue grew 6% due to a larger average fleet size and higher prices on replacement vehicles. Commercial rental revenue grew 19% due to increased demand and pricing. Segment pre-tax earnings declined 5.6% to $95.2 mln. Higher commercial rental and ChoiceLease performance was outweighed by higher depreciation due to changes in residual values of vehicles, accelerated depreciation, and lower used vehicle sales. Pre-tax segment operating margin declined 130 basis points to 8.5%.
Dedicated Transportation Solutions revenue spiked 25.1% to $340.6 mln while operating revenue increased 12.5% to $222.2 mln. The revenue growth took place due to new business and increased volumes. Pre-tax earnings grew 1.5% yr/yr to $13.9 mln as revenue growth outweighed higher startup costs on a new customer account. Pre-tax segment operating margin declined 60 basis points to 6.3%.
Supply Chain Solutions revenue increased 28.7% to $628.5 mln while operating revenue rose 23.0% to $462.8 mln. Increased volumes and new business drove the revenue growth while the acquisition of MXD also provided a boost. Pre-tax earnings jumped 69.2% to $37.4 mln due to revenue growth and better operating results across all verticals. Segment operating margin improved by 220 basis points to 8.1%.
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