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Ryder System Inc. on Feb. 11 reported fourth-quarter net income of $25.6 million, or 48 cents per share, compared with a loss of $53.5 million, or loss of $1.02, in the same period a year ago.
The fourth-quarter results fell short of Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 93 cents per share.
Revenue dropped 3% to $2.21 billion compared with $2.28 billion in the same quarter the year before. Ryder said the drop reflected lower fuel revenue of $96.1 million in the quarter from $140.7 million in 2019.
Ryder provides supply chain, dedicated transportation, and commercial fleet management services.
For the full year, the Miami-based company recorded a loss of $122.3 million, loss $2.34, compared with a loss of $24.4 million, loss 47 cents, in 2019.
Revenue declined to $8.42 billion from $8.93 billion a year ago.
“I am pleased that we delivered significantly higher year-over-year earnings in the fourth quarter and made progress on our initiatives to improve returns,” CEO Robert Sanchez said. “We generated $1.6 billion of free cash flow in 2020 in line with our goal to deliver positive free cash flow over the cycle.”
Sanchez said the COVID-19 pandemic impacted fourth-quarter and full-year earnings, but the company is optimistic about long-term growth.
“While the 2021 market environment remains uncertain and may be impacted by developments related to COVID-19 and other factors, we expect improving economic conditions, continued secular trends that favor outsourcing, and progress on our strategic initiatives. Based on this outlook and an improved deal pipeline, we expect higher contractual sales activity,” Sanchez said. “Actions taken to align the rental fleet size with lower demand conditions following the pandemic have been successful, resulting in fourth-quarter utilization levels higher than the prior year.”
Ryder has three business segments: Fleet Management Solutions, Supply Chain Solutions and Dedicated Transportation Solutions. Fleet Management Solutions and Dedicated Transportation Solutions reported lower fourth-quarter and year-over-year revenue. Supply Chain Solutions reported higher results.
The Fleet Management Solutions segment, Ryder’s largest, saw revenue fall 7% to $1.33 billion compared with $1.43 billion in the year-earlier period.
The company said operating revenue fell primarily due to a 7% decrease in rental revenue from lower demand on a smaller fleet.
In the Dedicated Transportation Solutions business segment, total revenue was down 13% to $301 million compared with $346 million in 2020. The company said total revenue and operating revenue declined primarily due to lower contractual sales in late 2019 and early 2020.
The Supply Chain Solutions division saw revenue increase by 10% to $711.2 million compared with $648.7 million a year ago. Ryder said revenue was up primarily due to new business, increased pricing and higher volumes. Revenue increases reflect growth in consumer packaged goods, retail and automotive.
“Improving used vehicle market conditions resulted in gains on sale in the second half of 2020 and enabled us to reduce inventory levels to within our target range,” Sanchez said. “Actions taken to align the rental fleet size with lower demand conditions following the pandemic have been successful, resulting in fourth-quarter utilization levels higher than the prior year.”
The company said that in the future, it expects growth in the Dedicated Transportation Solutions and Supply Chain Solutions divisions.
“Efforts to accelerate growth in SCS and DTS continue and include the launch of our national multimedia advertising campaign, which has generated an increase in sales leads and traffic to Ryder.com,” Sanchez said. “Operating revenue growth in SCS and DTS is expected to be within the high-single-digit target range, with FMS growth near the lower end of the mid-single-digit target range. The 2020 launch of RyderShare, our digital platform for real-time freight visibility and collaboration, continues to gain traction as the platform has been used to track almost 2 million shipments for supply chain and dedicated customers.”
Ryder Supply Chain Solutions ranks No. 10 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 5 on the TT Top 50 list of the largest logistics companies in North America.
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