Ryder System Tops Earnings Estimates, Raises Guidance

Ryder System Inc. (R), a major provider of integrated logistics and transportation solutions, reported fourth-quarter 2014 earnings per share of $1.60. The bottom line outpaced the Zacks Consensus Estimate of $1.59 and escalated 18.5% from $1.35 recorded in the year-ago quarter.

The company registered revenues of $1,656.3 million in the fourth quarter, up 2% year over year but below the Zacks Consensus Estimate of $1,681 million.

Operating revenues (total revenue less Fleet Management Solutions fuel and all subcontracted transportation) increased 5% year over year to $1,415.4 million. The revenue growth came on the back of higher commercial rental revenues, increased full service lease revenues and new business wins along with volume expansion in the Supply Chain Solutions division.

Segment Results

Fleet Management Solutions: Total revenue increased 2% year over year to $1,152.5 million in the fourth quarter buoyed by 10% growth in commercial rental revenues. Meanwhile, operating revenues moved up 6% year over year to $930.8 million.

Supply Chain Solutions: Total revenue stood at $618.4 million, up 3% from the year-ago quarter. Operating revenues (excluding subcontracted transportation) grew 4% year over year to $546.3 million. The growth was driven by higher volumes and business wins in areas like industrial goods, consumer packaged goods and retail along with the technology industry.

Liquidity and Capital Expenditures

Ryder System ended the year with cash and cash equivalents of $50.1 million compared with $61.6 million at end-2013. The company had long-term debt of $4,497 million against 3,930 million at the end of fiscal 2013.

Cash from operations was $1,370 million at the end of 2014 against $1,223.1 million in the same period last year. Net capital expenditure amounted to $1.68 billion at the end of 2014 versus $1.73 billion in the same period last year.

Guidance

For 2015, Ryder raised its earnings per share estimate to $6.25-$6.40 per share, up from the previous estimate of $5.58 per share. Total revenue for 2015 is expected to be $6.84 billion, up 3% while operating revenues for the same period will likely rise by 7% to $5.64 billion.

However, for the first quarter of 2015, the company expects earnings in the range of $0.95 to $1.00 per share, which is higher than its previous estimate of 92 cents per share.

Zacks Rank and Other Stocks

Ryder System currently has a Zacks Rank #4 (Sell).

Other better-ranked stocks in this sector include The Greenbrier Companies, Inc. (GBX), FreightCar America Inc. (RAIL) and CAI International Inc. (CAP). The Greenbrier carry a Zacks Rank #1 (Strong Buy) while the other two have Zacks Rank #2 (Buy).