Ryder’s Second-Quarter Net Income Drops on Weak Rentals
Ryder System Inc. reported second-quarter net income fell 14% to $73.8 million, or $1.38 per share, hurt by weaker rental and used truck results.
Revenue rose 2% to $1.70 billion. Profit excluding interest fell 9% at the vehicle rental and leasing unit that included a 10% drop in rental revenue and 15% lower sales for used trucks. Earnings on that basis rose 32% at the dedicated trucking business and 2% in the supply chain unit, the Miami-based company announced. Earnings in last year’s second quarter were $85.2 million, or $1.59, said a statement from the company whose supply chain unit ranks No. 13 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
Weakness in the rental and used truck markets also led Miami-based Ryder to lower its full-year earnings forecast to by 30 cents a share at the lower end to $5.49 per share, and 35 cents at the upper end of the outlook to $5.64.
“Although we are experiencing some market softness impacting the transactional parts of our business, we continue to benefit from secular outsourcing trends,” CEO Robert Sanchez said in the statement.
At the fleet management unit that nearly 70% of revenue, earnings before interest were $111.2 million. Rental performance was hurt by weaker demand, and lower prices for used trucks contributed to the result.
Dedicated earnings on that basis rose to $16.5 million, following a pattern reported by other companies with contract carriage units, such as No. 6 Swift Transportation. Dedicated revenue rose 16% to $258.3 million, aided by improved pricing and additional freight volumes.
Supply chain revenue climbed just 1% to $402.1 million. Earnings in that unit were $28.4 million, reflecting increased shipments and better pricing.
Excluding pension and other costs, Ryder earned $1.56 per share, topping the average Bloomberg News forecast of $1.54. Net income from continuing operations to common shareholders was $73.8 million.
