India Markets closed

Ryder's (R) Incurs Q4 Loss, Stock Down on Soft EPS Forecast

Zacks Equity Research

Ryder System R reported  fourth-quarter 2019 loss (excluding $1.01 from non-recurring items) of 1 cent per share against the Zacks Consensus Estimate of earnings 3 cents. Moreover, the bottom line declined more than 100% year over year primarily due to softening of rental demand. Total revenues amounted to $2,276.5 million, which beat the Zacks Consensus Estimate of $2,264.4 million. Also, the top line inched up 0.8% year over year.

More than weak revenues and year-over-year earnings decline, the company’s bearish bottom-line projections for the first quarter and 2020 disappointed investors. Consequently, the stock fell 10.3% to $45.01 per share on Feb 13.

For first-quarter 2020, the company anticipates adjusted earnings per share in the range of 65-80 cents. The Zacks Consensus Estimate for first-quarter earnings is currently pegged at 7 cents.

For 2020, Ryder, carrying a Zacks Rank #3 (Hold), anticipates adjusted earnings per share between $1.10 and $1.50. The Zacks Consensus Estimate for 2020 earnings is pegged at $2.55.  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company expects below-par conditions in rental to persist in 2020 due to the lackluster freight environment, particularly for heavy duty tractors.

Ryder System, Inc. Price, Consensus and EPS Surprise

 

Ryder System, Inc. Price, Consensus and EPS Surprise

Ryder System, Inc. price-consensus-eps-surprise-chart | Ryder System, Inc. Quote


Segmental Results

Fleet Management Solutions (FMS): Total revenues at this segment amounted to $1.4 billion, which rose 4% year over year. Operating revenues (excluding fuel) summed $1.2 billion, up 6% year over year. Segmental results were driven by larger average fleet size and favorable pricing of new vehicles. Notably, the lease fleet increased 7% in 2019 on a year-over-year basis.

Dedicated Transportation Solutions (DTS): Total revenues amounted to $346 million, down 5% from the year-ago quarter’s figure. Operating revenues (excluding fuel and subcontracted transportation) rose 4% year over year to $241 million backed by higher pricing and addition of new business.

Supply Chain Solutions (SCS): Total revenues in this segment were $649 million, down 3% year over year. Operating revenues (excluding fuel and subcontracted transportation) declined 5% year over year to $466 million. Segmental results were hurt primarily by previously-announced lost business and customer labor strikes.

Liquidity

Ryder exited the year with cash and cash equivalents of $73.6 million compared with $68.1 million at the end of 2018. The company’s total debt rose 19.2% to $7.92 billion.

As the company is investing substantially in its lease and rental fleets, capital expenditures (net) increased 12% year over year to $3.1 billion at 2019-end. Operating cash flow for 2019 was $2.1 billion, up 23.5% year over year.

2020 Outlook

Net capital expenditure for 2020 is predicted to be around $1.7 billion. Free cash flow is predicted to be positive $350 million owing to lower net capital expenditures.

Upcoming Releases

Investors interested in the broader Transportation sector are awaiting fourth-quarter 2019 earnings reports from key players like Expeditors International of Washington EXPD, Gol Linhas GOL and Hertz Global Holdings HTZ .

Expeditors will announce fourth-quarter 2019 results on Feb 18. Gol Linhas and Hertz will release fourth-quarter 2019 numbers on Feb 20 and Feb 24, respectively.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Hertz Global Holdings, Inc (HTZ) : Free Stock Analysis Report
 
Ryder System, Inc. (R) : Free Stock Analysis Report
 
Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
 
Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research