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Ryder System Inc. reported higher earnings and record revenue in the second quarter in all three business segments, reflecting new business and higher volumes.
Net income for the period ended July 30 was $75.2 million, or $1.43 per share, reflecting prior-year tax adjustments and a current-year gain on sale of property. That’s a 64% jump from a year ago when net income was $44.9 million, or 87 cents.
Revenue was $2.25 billion, up 7% from $2.09 billion last year.
The Miami-based company specializes in commercial fleet management, dedicated transportation and supply chain solutions.
Its operating revenue — generated from the primary business — gained 11% to $1.8 billion.
“Despite a softer freight environment compared to 2018, we delivered double-digit operating revenue growth driven by strong performance in our contractual dedicated transportation, supply chain and lease businesses,” CEO Robert Sanchez said.
For the six months, net income was $120.5 million, or $2.28, up 47% from year-ago profit of $81.8 million, or $1.55.
Total revenue was $4.43 billion compared with $3.99 billion. On an operating basis, revenue was $3.57 billion compared with $3.18 billion.
Capital expenditures rose year to date to $2.2 billion from $1.5 billion a year ago, reflecting higher planned investments to grow and refresh the lease fleet, the company said.
The company said it expects to meet or exceed its target 11,000-unit lease fleet growth this year, which will be a new record.
“In dedicated, we achieved solid double-digit revenue growth from both new outsourcing wins and current leasing customers expanding their Ryder relationship to include drivers and related services,” he continued. “Supply chain also delivered solid growth, driven by the consumer packaged goods and automotive verticals.”
Its Fleet Management Solutions segment’s total revenue was $1.39 billion, up 7% compared with $1.30 billion in the same period a year earlier.
Commercial rental revenue increased 9% from the prior year due to higher demand and pricing, the company reported.
The Supply Chain Solutions segment’s total revenue was up 7% to $649 million.
The Dedicated Transportation Solutions segment’s total revenue was up 10% to $362 million due to new business and customer expansions.
Ryder System ended the quarter with 157,300 leased vehicles, a gain of 10% from 143,000 a year ago.
Ryder's revenue was $2.25 billion, up 7% from $2.09 billion last year during the second quarter. (TT file photo)
Commercial rental trucks accounted for 45,400 units, a gain of 9.1%. And Ryder reported 55,600 vehicles under maintenance contracts, a gain of 1% from 55,000 a year ago.
The company’s dedicated fleet grew 8.2% in the quarter to 9,700 vehicles from 8,900 a year ago. And the number of vehicles in the Supply Chain Solutions business increased 12.8% to 9,700 from 8,600, Ryder reported.
Sanchez said there is a healthy demand environment across the contractual lease, dedicated and supply chain businesses, but beginning late in the quarter, softening emerged in demand for heavy-duty tractors in used vehicle sales and rental product lines, driven primarily by slowing demand from for-hire transportation companies.
Ryder is on track to achieve strong contractual sales for the year due to outsourcing trends in transportation and logistics, he said.
“Our strategy to expand our medium-duty truck rental business to capture growing e-commerce demand is on track. However, given the slower demand from the for-hire sector, we now anticipate heavy-duty tractor rental activity to be somewhat below our prior forecast,” he continued.
The company expects to largely mitigate that impact via asset management and other cost actions.
Ryder revised its full-year forecast downward to a range of $4.80 to $5.10 compared with $5.28 to $5.58 previously. Last year, it earned $5.44.
The forecast for continuing operations this year was also lowered to a range of $5.50 to $5.80 from $6.05 to $6.35. That result last year was $5.97.
Sanchez said Ryder also plans to expand its asset-sharing program for commercial vehicles and plans to take advantage of the growth in e-commerce.
Ryder Supply Chain Solutions ranks No. 11 on the Transport Topics Top 100 list of for-hire companies in North America; and it ranks No. 6 on TT's Top 50 list of the largest logistics companies in North America.