Ryder System reported higher revenue growth and profits across all of its business units in the fourth quarter and full year 2017.
CEO Robert Sanchez said results for the Miami-based truck leasing and logistics company were “in line with our expectations” and that he expects positive trends to continue in 2018.
“We are anticipating solid earnings growth across all business segments,” Sanchez said in a statement Feb. 16. “We forecast a significant increase in ChoiceLease fleet growth of 6,500 vehicles, driven by a continued trend toward outsourcing, our ongoing sales and marketing initiatives and a strengthening freight environment.”
The company also plans to expand its rental fleet by 6% and increase prices, Sanchez said.
Ryder posted net income of $643 million, or $12.11 a share, on revenue of $1.94 billion in the fourth quarter. The results includes a one-time benefit of $563.7 million from a reduction in future tax liability under the Tax Cuts and Jobs Act. The company earned $49.2 million, or 91 cents, on revenue of $1.73 billion in the fourth quarter of 2016.
For the year, Ryder said net income was $790.6 million, or $14.87, on revenue of $7.33 billion. That compared with net income of $262.5 million, or $4.90, on revenue of $6.79 billion in 2016.
Excluding the effect of tax changes, however, Ryder reported earnings from continuing operations of $78.8 million in the fourth quarter, versus $69.2 million in the same period a year ago. For the year, earnings from continuing operations were $313.8 million in 2017 versus $406.4 million in 2016.
Revenue from Ryder’s largest business unit, Fleet Management Solutions, increased 8% to $1.24 billion in the three months ended Dec. 31, while earnings before taxes increased 43% to $91.7 million. The business benefited from higher rental truck demand, but also was negatively affected by results of used vehicle sales, increased depreciation and higher insurance costs.
Revenue in the Dedicated Transportation Solutions business unit grew 11% in the quarter to $284 million, but earnings before taxes rose only 1% to $15.4 million.
Growth was strongest in the Supply Chain Solutions business unit, jumping 26% to $540 million and earnings before taxes increasing 5% to $27.7 million.
Sanchez said he expects the new tax law to boost earnings going forward and to enhance the advantages of leasing over ownership. He also credited the tax law for allowing the company to boost its dividend to stockholders from 46 cents a share to 52 cents and pay out $23 million in bonuses to employees in the United States.
Improved earnings and lower taxes will boost investments in sales and marketing, new product development and technology, Sanchez said.
The company also will spend more to increase the size of its lease and rental fleets, he added.
At the end of 2017, Ryder had a total of 136,500 leased vehicles and 37,800 rental vehicles, plus 8,200 vehicles used in dedicated contract carriage operations.