The company reported comparable earnings per share of $3.32, up 11% year over year, driven by higher contractual revenue and strategic cost-cutting initiatives, according to a Thursday (July 24) earnings release. Revenue reached $2.6 billion, up 2% from last year.
The company’s transformation strategy continues to pay dividends, with asset-light supply chain and dedicated transportation services now representing a majority of revenue versus traditional fleet management, Ryder Chairman and CEO Robert Sanchez said Thursday during the company’s quarterly earnings call.
This “balanced growth strategy” has shifted Ryder toward businesses that generate more stable cash flows across economic cycles, Sanchez said. He noted during the call that over 90% of Ryder’s operating revenue comes from multiyear contracts.
“The business continues to outperform prior cycles, driven by our resilient contractual portfolio that reflects the actions we’ve taken under our balanced growth strategy to de-risk the business, increase the return profile and accelerate growth in our asset-light supply chain and dedicated businesses,” Sanchez said during the call.
However, Ryder’s used vehicle sales faced headwinds as the company moved aged inventory through wholesale channels, Sanchez said.
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Looking ahead, Sanchez said he expects Ryder to benefit from long-term trends that favor the outsourcing of transportation and logistics, the value that the company offers customers, and the increase of industrial manufacturing in the United States.
Ryder said in a Thursday presentation that its full-year earnings forecast is $12.85 to $13.30 per share, down from the previous $12.85 to $13.60. The updated forecast anticipates strong contractual earnings performance, a muted recovery in used-vehicle sales and near-term contractual sales headwinds from macroeconomic uncertainty.
“Our updated forecast continues to reflect contractual earnings growth with a more muted second half recovery in used vehicle sales,” Sanchez said during the call. “All those sales pipelines remain strong. The prolonged freight downturn and economic uncertainty continue to cause some customers and prospects in lease and dedicated to delay decisions. The near-term contractual sales headwinds are consistent with current market conditions.”
