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Ryder (R) Posts Q2 Loss, Revenues Drop Y/Y on Coronavirus Woes
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Ryder System, Inc. (R - Free Report) incurred a loss (excluding 47 cents from non-recurring items) of 95 cents per share in second-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of $1.44. In the year-ago period, the company reported earnings of $1.4 per share. Coronavirus-related woes hurt pre-tax earnings to the tune of $45 million in the second quarter.
Total revenues of $1,895.3 million missed the Zacks Consensus Estimate of $1,998.8 million. Moreover, the top line declined 15.6% year over year due to lower commercial rental demand and reduced automotive activity in Supply Chain Solutions unit, thanks to coronavirus. Following this dismal performance, shares of the company declined 10% at the close of business on Jul 29.
Segmental Results
Fleet Management Solutions (FMS): Total revenues in the segment amounted to $1.2 billion, which dropped 14% year over year. Operating revenues (excluding fuel) summed $1.1 billion, down 8% year over year. Segmental results were affected by decrease in commercial rental revenues due to low demand. Commercial rental revenues fell 33% from the year-earlier quarter’s figure. ChoiceLease revenues inched up 1% year over year owing to increase in fleet size and higher prices on new vehicles.
Dedicated Transportation Solutions (DTS): Total revenues amounted to $294 million, down 19% from the year-ago quarter’s figure. The decline in DTS’ total revenues was primarily due to lower subcontracted transportation revenues and lower fuel costs passed to customers. Operating revenues (excluding fuel and subcontracted transportation) decreased 8% to $228 million.
Supply Chain Solutions (SCS): Total revenues in the segment were $519 million, down 20% year over year. Operating revenues (excluding fuel and subcontracted transportation) declined 16% year over year to $405 million. Segmental results were hurt by coronavirus-related volume reductions in the automotive sector.
Ryder System, Inc. Price, Consensus and EPS Surprise
Ryder, carrying a Zacks Rank #3 (Hold), exited the year with cash and cash equivalents of $831.5 million compared with $73.6 million at the end of 2019. The company’s total debt rose to $8,147.7 million at the end of the second quarter from $7,924.8 million at the end of 2019.
Year-to-date capital expenditures declined 72.7% year over year to $0.6 billion. This decline in capital expenditures was due to lower investments in the lease and rental fleets as a result of reduced demand thanks to coronavirus. With reduced capital expenditures, free cash flow was $612 million in the year-to-date period against negative free cash flow of $909 million in the year-ago period.
Anticipating low lease sales in 2020, the company estimates full-year gross capital expenditures in the range of $1-$1.3 billion, less than the previous (prior to coronavirus outbreak) forecast of $2.1 billion. This reduction in capital expenses is estimated to generate free cash flow of $1-$1.2 billion in 2020, against negative free cash flow of $1.1 billion in 2019. Operating cash flow is estimated between $1.8 billion and $2 billion in the current year. The company is on track to realize annual savings of $30 million in 2020 from its maintenance cost initiative.
Sectorial Snapshot
Let’s take a look into some other Zacks Transportation sector companies’ second-quarter earnings.
Canadian National’s (CNI - Free Report) second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) were in line with the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year. Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and fell 21.8% year over year. This company carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
J.B. Hunt Transport (JBHT - Free Report) , carrying a Zacks Rank #3, reported second-quarter earnings of $1.14 per share that surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million beat the Zacks Consensus Estimate of $2,060.9 million.
Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 company’s total revenues of $547.9 million lagged the consensus mark of $550.2 million.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Ryder (R) Posts Q2 Loss, Revenues Drop Y/Y on Coronavirus Woes
Ryder System, Inc. (R - Free Report) incurred a loss (excluding 47 cents from non-recurring items) of 95 cents per share in second-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of $1.44. In the year-ago period, the company reported earnings of $1.4 per share. Coronavirus-related woes hurt pre-tax earnings to the tune of $45 million in the second quarter.
Total revenues of $1,895.3 million missed the Zacks Consensus Estimate of $1,998.8 million. Moreover, the top line declined 15.6% year over year due to lower commercial rental demand and reduced automotive activity in Supply Chain Solutions unit, thanks to coronavirus. Following this dismal performance, shares of the company declined 10% at the close of business on Jul 29.
Segmental Results
Fleet Management Solutions (FMS): Total revenues in the segment amounted to $1.2 billion, which dropped 14% year over year. Operating revenues (excluding fuel) summed $1.1 billion, down 8% year over year. Segmental results were affected by decrease in commercial rental revenues due to low demand. Commercial rental revenues fell 33% from the year-earlier quarter’s figure. ChoiceLease revenues inched up 1% year over year owing to increase in fleet size and higher prices on new vehicles.
Dedicated Transportation Solutions (DTS): Total revenues amounted to $294 million, down 19% from the year-ago quarter’s figure. The decline in DTS’ total revenues was primarily due to lower subcontracted transportation revenues and lower fuel costs passed to customers. Operating revenues (excluding fuel and subcontracted transportation) decreased 8% to $228 million.
Supply Chain Solutions (SCS): Total revenues in the segment were $519 million, down 20% year over year. Operating revenues (excluding fuel and subcontracted transportation) declined 16% year over year to $405 million. Segmental results were hurt by coronavirus-related volume reductions in the automotive sector.
Ryder System, Inc. Price, Consensus and EPS Surprise
Ryder System, Inc. price-consensus-eps-surprise-chart | Ryder System, Inc. Quote
Liquidity
Ryder, carrying a Zacks Rank #3 (Hold), exited the year with cash and cash equivalents of $831.5 million compared with $73.6 million at the end of 2019. The company’s total debt rose to $8,147.7 million at the end of the second quarter from $7,924.8 million at the end of 2019.
Year-to-date capital expenditures declined 72.7% year over year to $0.6 billion. This decline in capital expenditures was due to lower investments in the lease and rental fleets as a result of reduced demand thanks to coronavirus. With reduced capital expenditures, free cash flow was $612 million in the year-to-date period against negative free cash flow of $909 million in the year-ago period.
Anticipating low lease sales in 2020, the company estimates full-year gross capital expenditures in the range of $1-$1.3 billion, less than the previous (prior to coronavirus outbreak) forecast of $2.1 billion. This reduction in capital expenses is estimated to generate free cash flow of $1-$1.2 billion in 2020, against negative free cash flow of $1.1 billion in 2019. Operating cash flow is estimated between $1.8 billion and $2 billion in the current year. The company is on track to realize annual savings of $30 million in 2020 from its maintenance cost initiative.
Sectorial Snapshot
Let’s take a look into some other Zacks Transportation sector companies’ second-quarter earnings.
Canadian National’s (CNI - Free Report) second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) were in line with the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year. Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and fell 21.8% year over year. This company carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
J.B. Hunt Transport (JBHT - Free Report) , carrying a Zacks Rank #3, reported second-quarter earnings of $1.14 per share that surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million beat the Zacks Consensus Estimate of $2,060.9 million.
Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 company’s total revenues of $547.9 million lagged the consensus mark of $550.2 million.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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