Truck leasing and logistics company Ryder System brought in 5.25% more revenue, enough to set a second-quarter record, but poor used-truck pricing and higher expenses diminished earnings by 30.4%, year-over-year.
Miami-based Ryder, No. 13 on the Transport Topics Top 100 list of for-hire carriers, annnounced July 26 that it had net income of $50.8 million, or 96 cents per share, on quarterly revenue of $1.79 billion. For the three months ended June 30, 2016, the company earned $73.8 million, or $1.38, on revenue of $1.7 billion.
All three of the company’s major divisions increased revenue, year-over-year. But while the segments remained profitable, they all did so at lower levels than during last year’s second quarter.
Bloomberg News reported the consensus estimate for second-quarter earnings was 91 cents per share, which the company beat by 5 cents.
Ryder Chairman and CEO Robert Sanchez said in the earnings statement, “Although used-vehicle sales pricing came in somewhat better than anticipated, overall results were lower than expected, driven by valuation adjustments made to better position inventory for sale.”
The company’s largest unit is Fleet Management Solutions, mainly full-service truck leasing. Selling trucks as they come off their leases is a major responsibility for the division’s managers.
Quarterly revenue for the division improved by 1% to $1.16 billion, but earnings before income taxes fell 39% to $68.1 million.
At Dedicated Transportation Solutions, dedicated contract carriage, the 10% decline in earnings was “primarily due to higher maintenance costs on certain older model-year vehicles and higher insurance premiums,” the earnings statement said.
Higher maintenance costs was also an issue for Fleet Management Solutions.
At the Supply Chain Solutions unit, third-party logistics, quarterly profits dropped 9%, year-over-year, “related to higher costs incurred during the start-up phase of certain new accounts.”