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Dec 31, 2019
Ryder Q4 2019 Earnings Report
Ryder reported a record total revenue for Q4 2019 despite a GAAP EPS loss, impacted by residual value estimate changes and a pension settlement charge.
Key Takeaways
Ryder System, Inc. reported record total revenue of $2.3 billion for the fourth quarter of 2019, a 0.7% increase year-over-year. However, the company experienced a GAAP EPS loss of $(1.02), primarily due to the impact of previously announced changes in residual value estimates and a one-time pension settlement charge. Comparable EPS (non-GAAP) from continuing operations was a loss of $(0.01).
Delivered record total and operating revenue, driven by favorable outsourcing trends.
Earnings reflect the impact of the previously announced vehicle residual value estimate change.
Rental demand softened and came in slightly below expectations.
Continued to benefit from long-term outsourcing trends.
Ryder
Ryder
Ryder Revenue by Segment
Revenue by Segment
ChoiceLease Revenue
CapyFin.comCommercial rental Revenue
CapyFin.comSelectCare & other Revenue
CapyFin.comFuel services Revenue
CapyFin.comSupply Chain Solutions Revenue
CapyFin.comDedicated Transport Revenue
CapyFin.com Forward Guidance
Ryder anticipates a strategy of moderate growth in FMS and accelerating growth in dedicated and supply chain, delivering a balance of revenue and earnings growth with positive free cash flow over a cycle.
Positive Outlook
- Expect an increase in EPS reflecting a lessened impact from the previously announced vehicle residual value estimate change and growth in our contractual business.
- Benefits related to our zero-based budgeting cost savings program are anticipated to offset higher employee compensation and benefit costs.
- Plan to continue to invest in strategic initiatives in sales and marketing including additional resources in dedicated and supply chain, information technology, and new product development related to disruptive trends in the industry.
- Expect a significant reduction in capital spending as a result of slower market conditions in rental and lower lease growth.
- Anticipate our balance sheet leverage to decline modestly at year-end.
Challenges Ahead
- Expect year-over-year operating revenue to be unchanged.
- Anticipate growth in lease and supply chain to be offset by a slowdown in rental and dedicated transportation solutions.
- Anticipate softer conditions in rental throughout the year reflecting a weaker freight environment, particularly for heavy duty tractors.
- Expect earnings headwinds from prior-year favorable insurance developments, residual value estimate changes on vehicles used in this segment, and strategic investments.
- Expect a near-term negative earnings impact related to some of our return-on-capital action plans which are expected to improve performance in future years.
Revenue & Expenses
Visualization of income flow from segment revenue to net income