Ryder System Reports Strong Q1 2024 Results, Beats EPS Estimates

Ryder System Inc. reports impressive Q1 2024 results, beating earnings expectations and delivering solid revenue growth despite market challenges. The company's resilient business model and strategic initiatives drive its outperformance.

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Safak Costu
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Ryder System Reports Strong Q1 2024 Results, Beats EPS Estimates

Ryder System Reports Strong Q1 2024 Results, Beats EPS Estimates

Ryder System, Inc., a leading transportation and logistics company, reported impressive first quarter 2024 results, surpassing earnings expectations and delivering solid revenue growth. The company posted earnings per share (EPS) of $2.14, beating the Zacks Consensus Estimate of $1.62, despite a 23.8% year-over-year decline due to weaker market conditions in used vehicle sales and rental.

Total revenues for the quarter reached $3,098 million, exceeding the Zacks Consensus Estimate and marking a 5% increase compared to the same period last year. This growth was primarily driven by recent acquisitions and contractual revenue growth, which helped offset the impact of lower commercial rental revenue. Ryder's Fleet Management Solutions (FMS) segment experienced a 3% year-over-year decline in total revenues, while the Supply Chain Solutions (SCS) and Dedicated Transportation Solutions (DTS) segments reported earnings growth.

Why this matters: Ryder's strong performance in the face of challenging market conditions demonstrates the resilience of its business model and the effectiveness of its strategic initiatives. The company's ability to navigate headwinds and deliver growth highlights its position as a leader in the transportation and logistics industry.

During the quarter, Ryder generated $526 million in net cash from operating activities and $13 million in free cash flow. The company's balanced growth strategy continues to drive outperformance relative to prior cycles, with an adjusted return on equity (ROE) of 17% for the trailing 12-month period, in line with its long-term target. Ryder's pricing and cost recovery actions have helped mitigate the impact of weakening market conditions in used vehicle sales and rental.

Looking ahead, Ryder expects its FMS and SCS segments to achieve their target earnings before tax (EBT) margins for the full year 2024. However, the DTS segment's EBT margins are anticipated to be slightly below the segment's long-term target due to acquisition integration and related costs. For the second quarter of 2024, Ryder projects adjusted EPS in the range of $2.75 to $2.95, and the company has updated its full-year 2024 adjusted EPS guidance to $11.75 to $12.50, up from the previous range of $11.50 to $12.50.

Robert Sanchez, Ryder's chairman and CEO, commented on the company's performance, stating, "Our outperformance was driven by better-than-expected used vehicle results and benefits from our ongoing maintenance cost savings initiative." He also highlighted Ryder's strong balance sheet and solid investment-grade credit rating, which provide capacity for targeted acquisitions, investments, and returning capital to shareholders.

Ryder's first quarter 2024 results showcase the company's ability to navigate a challenging freight environment and deliver solid earnings. The integration of strategic acquisitions, such as Cardinal Logistics and Impact Fulfillment Services, has contributed to Ryder's growth and resilience. With a focus on opportunities and a commitment to shareholder value, Ryder is well-positioned to continue its strong performance in the coming quarters.

Key Takeaways

  • Ryder reported strong Q1 2024 results, beating earnings expectations.
  • Revenue grew 5% YoY, driven by acquisitions and contractual growth.
  • Ryder's business model demonstrated resilience in challenging conditions.
  • Ryder expects FMS and SCS segments to meet full-year 2024 targets.
  • Ryder updated its full-year 2024 adjusted EPS guidance to $11.75-$12.50.