Ryder had a fourth quarter that saw the company largely hold its own from the comparable quarter a year earlier, with no big swings in revenue or profitability.
One sign of a strengthening freight market was that its used tractor sales brought in an average price 1% more than a year earlier. While that may not seem like much, that year-on-year comparison has been running negative for several quarters.
The steadiness of the business can be seen in the segment revenue. Fleet management Solutions, which has long been the core business at Ryder but is slowly seeing its share of revenue decline as other units rise, had a 1% decline in total revenue. Supply Chain Solutions, Ryder’s contract logistics segment, reported a 3% increase in revenue. Dedicated Transportation Solutions, a dedicated contract carrier that would be most exposed to a weak trucking market, reported a decline of 8% in revenue.
There were bigger swings in earnings before tax (EBT) at the segments. FMS had a 10% decline in EBT, with overall used vehicle sales cited as a reason. Comparable sales prices for vehicles other than tractors were down 9%.
EBT at SCS was down 8%. Ryder said the downturn was created by revenue growth being “more than offset by automotive results.”
DTS had a 19% increase in profitability despite the drop in revenue. It said that improvement was because of “lower bad debt and benefits from acquisition synergies.” DTS expanded two years ago with the acquisition of Cardinal Logistics.
For the full year, Ryder reported non-GAAP earnings per share from continuing operations of $12.92, an 8% increase from 2024. Ryder used the occasion of the earnings to disclose its forecast for non-GAAP earnings next year of $13.45-$14.45. Operating revenue is projected to rise 3%, with most of that coming from SCS.
“Fourth quarter results represented our fifth consecutive quarter of earnings-per-share growth and were in line with our expectations,” outgoing CEO Robert Sanchez said in a prepared statement. “SCS and DTS continued to generate pre-tax earnings as a percent of operating revenue at their high single-digit target. In FMS, momentum from our lease pricing and maintenance cost savings initiatives continued to deliver solid quality of earnings despite used vehicle sales and rental market conditions.”
Sanchez is retiring March 31, to be succeeded by COO John Diez.
First stock market reactions to the earnings report were negative at 7:20 a.m. EST, about 20 minutes after the earnings were released, Ryder (NYSE:R) was down about 3.4%, to $205. It is up about 34.7% in the last 12 months and has ridden a strong market for logistics equities to be up 10.8% in just the last months.
Sanchez will conduct an earnings call at 11 a.m. EST.
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