Ryder System, Inc. (R) is one of the leading providers of integrated logistics and transportation solutions. Product offerings range from full-service leasing, commercial rental and programmed maintenance of vehicles to integrated services such as dedicated contract carriage and carrier management.
Ryder’s efforts toward deploying a fuel-efficient fleet will help strengthen its foothold in the rapidly growing market of environment-friendly vehicles. Moreover, declining oil prices will help the company boost margins in the forthcoming quarter.
In Dec 2014, Ryder and Slay Transportation Company entered into a full-service lease agreement covering 142 vehicles. Hence, we believe that Ryder’s series of contract wins along with a favorable lease rate environment will propel growth for the company going ahead.
However, increased competition could create downward pressure on freight rates and continued rate pressure may adversely affect the company’s profitability. Further, Ryder is exposed to the residual risk on the value of its fleet of vehicles. A significant portion of the company’s business depends upon the market for used vehicles. As a result, if the market for used vehicles remains subdued, or vehicles lack proper maintenance, the company would incur lower sales proceeds from used vehicle sales.
Currently, Ryder has a Zacks Rank #4 (Sell), but that could definitely change following Ryder’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: Ryder beats on earnings. Our consensus earnings estimate called for EPS of 1.59/share, and the company reported EPS of $1.60 instead. Investors should note that these figures take out stock option expenses.
Revenue: Ryder reported revenues of $1,656.3 million. This missed our consensus estimate of $1,681 million.
Key Stats to Note: Ryder reported growth in fleet size for the reported quarter. Moreover, it also witnessed solid growth in operating revenue during the quarter.
Stock Price: Ryder shares were down almost 2.42%. Clearly, the initial reaction to the release is negative.
Check back later for our full write up on this Ryder earnings report later!
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