Ryder System, Inc. (R) has entered into an agreement with Service Relationship Management (SRM) solutions provider, Decisiv, Inc to offer maintenance service solutions to large and for-hire trucks fleet. We believe the new partnership will allow the company to expand its Managed Maintenance solution further and offer significant financial synergies.
The partnership will incorporate Ryder’s fleet maintenance infrastructure and Decisiv’s technology support that will provide a comprehensive fleet maintenance together with more clarity into cost assessment for the large national fleet.
Apart from Maintenance solutions, Ryder is focusing on growth in commercial rental and leased vehicles and information technology initiatives. The company expects demand in Full Service Lease, solid performance in Commercial rentals along with various maintenance initiatives to improve 2014 earnings.
Further, the Supply Chain business is expected to grow on improved retention, strong new sales and modest rise in customer volumes. Given these tailwinds, Ryder expects earnings in the first quarter to range from 83–88 cents per share, representing 2–9% growth year over year. For 2014, the company expects earnings per share of $5.30 to $5.45, up 9% to 12% year over year.
Additionally, Ryder is targeting emerging markets for fuel-efficient vehicles under projects like SANBAG (San Bernardino Associated Governments). In the near term, we expect the demand for such vehicles to rise offering market opportunity.
Further, to support its fuel-efficient vehicle business, the company has also opened its first gas fuelling station in North America that cater to its lease and rental customers as well as general public. Although small, the company expects demand for its natural gas vehicle business to remain strong going forward.
Ryder currently has a Zacks Rank #2 (Buy).
Other Stocks
Other stocks with Zacks Rank #2 (Buy) include GATX Corp. (GMT), Trinity Industries Inc. (TRN) and Westinghouse Air Brake Technologies Corp. (WAB).
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