MIAMI--(BUSINESS WIRE)--Feb 12, 2025--
Ryder System, Inc. (NYSE: R) reported results for the three months ended December 31 as follows:
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Total and operating revenue for the three months ended December 31 were as follows:
CEO Comment
"Ryder delivered strong results in 2024 and year-over-year earnings growth during the fourth quarter, despite ongoing freight market headwinds," says Ryder Chairman and CEO Robert Sanchez. "This marks the first quarter in the last eight with year-over-year comparable earnings growth. These results were driven by double-digit earnings growth in each of the segments, reflecting the strength of our contractual lease, supply chain, and dedicated businesses. Our ability to generate ROE of 16% during this extended freight cycle downturn continues to demonstrate consistent execution and the resilience of our transformed business model.
"SCS delivered record fourth-quarter earnings which benefited from higher volumes and optimization efforts in our omnichannel retail vertical. In FMS, lease earnings growth more than offset headwinds in rental and used vehicle sales, resulting in solid pretax earnings as a percentage of operating revenue of 11.6%. DTS also delivered record fourth-quarter earnings reflecting strong performance in our legacy business and the Cardinal acquisition.
"The earnings power of our contractual businesses continues to increase our capital deployment capacity, enabling us to invest in profitable growth and strategic initiatives, while also returning capital to shareholders through buybacks and increased dividends.
"I am proud of our team's ongoing execution of our balanced growth strategy. Our transformed business model is significantly outperforming prior cycles and we are confident that it will continue to deliver higher highs and higher lows, demonstrating the durability of the enhanced model."
Fourth Quarter 2024 Segment Review
Fleet Management Solutions: Earnings Growth from Strong ChoiceLease Performance more than Offsets Weaker Rental Market Conditions
Supply Chain Solutions: Earnings Growth Reflects Strong Operating Performance
Dedicated Transportation Solutions: Earnings Growth Reflects Acquisition Benefits
Corporate Financial Information
Tax Rate
Our effective income tax rate from continuing operations was 25.4%, as compared to 22.5% in the prior year, and our comparable effective income tax rate (a non-GAAP measure) from continuing operations was 24.8%, as compared to 22.1% in the prior year, due to lower discrete tax benefits.
Capital Expenditures, Cash Flow, and Leverage
Full year capital expenditures decreased to $2.7 billion in 2024 compared to $3.3 billion in 2023, primarily reflecting reduced investments in the ChoiceLease fleet due to lower sales activity.
Full year net cash provided by operating activities from continuing operations was $2.3 billion compared to $2.4 billion in 2023, due to timing of vendor payments and prefunding of future required pension contributions. Free cash flow (non-GAAP) of $133 million compared to negative $54 million in 2023, reflects reduced capital expenditures partially offset by lower proceeds from sales of used vehicles and property and lower cash from operating activities.
Debt-to-equity as of December 31, 2024 was 250%, compared to 232% at year-end 2023, and is at the bottom end of the company's long-term target of 250% to 300%.
Outlook
"We expect the positive momentum in our contractual businesses to continue into 2025, contributing to higher earnings in all business segments," says Ryder Chief Financial Officer Cristina Gallo-Aquino. "The high end of our 2025 forecast range assumes continued contractual earnings growth and a very modest improvement in rental demand later in the year. We remain well-positioned to benefit from a cycle upturn in all our business segments and are confident that secular growth trends continue to support long-term revenue and earnings growth."
Supplemental Company Information
Business Description
Ryder System, Inc. is a leading supply chain, dedicated transportation, and fleet management solutions company. Ryder's stock (NYSE: R) is a component of the Dow Jones Transportation Average and the S&P MidCap 400 ® index. The company's financial performance is reported in the following three, inter-related business segments:
For more information on Ryder System, Inc., visit investors.ryder.com and ryder.com.
Note: Regarding Forward-Looking Statements
Certain statements and information included in this news release are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995, including: our forecast; our outlook; our expectations regarding market conditions, such as rental demand and weakening used vehicle sales and rental; our expectations regarding the freight cycle, including timing and the impact of the freight cycle on our businesses; our expectations regarding total and operating revenue, earnings per share, comparable earnings per share, adjusted ROE, earnings before income tax, net cash from operating activities from continuing operations, debt-to-equity, capital expenditures, operating cash flow and free cash flow, and the causes of change; our ability to execute our balanced growth strategy; the impact of inflationary pressures; our expectations regarding commercial rental demand and utilization and used vehicle sales volume and pricing; our expectations regarding long-term profitable growth and secular growth trends; our expectations regarding used vehicle inventory and fleet size; our ability to outperform prior cycles; our ability to support organic growth, including growing our contractual lease, dedicated, and supply chain businesses at targeted returns; our expectations regarding strategic investments and acquisitions, including the acquisitions of Cardinal Logistics; our expectations with respect to our actions to increase returns and create long-term value; and our expectations regarding our ability to return capital to shareholders, including through share repurchases and dividends. Our forward-looking statements also include our estimates of the impact of residual value estimates on earnings and depreciation expense that is based in part on our current assessment of the residual values and useful lives of revenue-earning equipment based on multi-year trends and our outlook for the expected near- and long-term used vehicle market. A variety of factors, many of which are outside of our control, could cause residual value estimates to differ from actual used vehicle sales pricing, such as changes in supply and demand of used vehicles; volatility in market conditions; changes in vehicle technology; competitor pricing; regulatory requirements, including changes to tariffs; driver shortages; customer requirements and preferences; and changes in underlying assumption factors.
All of our forward-looking statements should be evaluated by considering the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Important factors that could cause such differences include: changes in general economic and financial conditions in the U.S. and worldwide; supply chain and labor challenges and vehicle production constraints, including original equipment manufacturer delays; the effect of geopolitical events; our ability to adapt to changing market conditions, including lower than expected contractual sales, decreases in commercial rental demand or utilization, poor acceptance of rental pricing, declining market demand for or excess supply of used vehicles impacting current or estimated pricing, and our anticipated proportion of retail versus wholesale sales; declining customer demand for our services; higher than expected maintenance costs; lower than expected benefits from our cost-savings initiatives; our ability to effectively and efficiently integrate acquisitions into our business; lower than expected benefits from our sales, marketing, and new product initiatives; setbacks in the economic market or in our ability to retain profitable customer accounts; impact of changing laws and regulations, such as tariffs, trade restrictions or trade agreements; difficulty in obtaining adequate profit margins for our services; inability to maintain current pricing levels due to, for example, economic conditions, business interruptions, expenditures, labor disputes, and extreme weather or other natural occurrences; competition from other service providers; changes in technology and new entrants; professional driver and technician shortages resulting in higher procurement costs and turnover rates; impact of supply chain disruptions; higher than expected bad debt reserves or write-offs; decrease in credit ratings; increased debt costs; adequacy of accounting estimates; our ability to effectively and efficiently integrate acquisitions into our business; higher than expected reserves and accruals particularly with respect to pension, taxes, insurance, and revenue; impact of changes in our residual value estimates and accounting policies, including our depreciation policy; unanticipated changes in fuel and alternative energy prices; unanticipated currency exchange rate fluctuations; fluctuations in inflation or interest rates; our ability to manage our cost structure; and the risks described in our filings with the Securities and Exchange Commission (SEC). The risks included here are not exhaustive. New risks emerge from time to time, and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Note: Regarding Non-GAAP Financial Measures
This news release includes certain non-GAAP financial measures as defined under SEC rules. Refer to Appendix - Non-GAAP Financial Measure Reconciliations at the end of the tables following this press release for reconciliations of the most comparable GAAP measure to the non-GAAP financial measure and the reasons why management believes the measure is important to investors. Additional information regarding non-GAAP financial measures as required by Regulation G and Item 10(e) of Regulation S-K can be found in our Form 10-K, Form 10-Q, and Form 8-K filed with the SEC as of the date of this release, which are available atinvestors.ryder.com.
CONFERENCE CALL AND WEBCAST INFORMATION
Ryder’s earnings conference call and webcast is scheduled for February 12, 2025 at 11:00 a.m. ET. To join, click here.
LIVE AUDIO VIA PHONE
WEBCAST REPLAY
An audio replay including the slide presentation will be available within four hours following the call. Click here, then select Financials/Quarterly Results and the date.
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Ryder is a leader in supply chain, dedicated transportation, and fleet management solutions. (Photo: Business Wire)
