A month has gone by since the last earnings report for Ryder (
R Quick Quote R - Free Report) . Shares have added about 18.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ryder due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Ryder Misses on Q4 Earnings
Ryder delivered fourth-quarter 2020 earnings per share (excluding 35 cents from non-recurring items) of 83 cents per share, which missed the Zacks Consensus Estimate of 93 cents. The company had reported a loss of 1 cent per share in the prior-year quarter.
Total revenues of $2,212.9 million also missed the Zacks Consensus Estimate of $2,232.1 million and fell 2.8% on a year-over-year basis. The top line declined primarily due to lower fuel revenues. Segmental Results Fleet Management Solutions (FMS): Total revenues in the segment amounted to $1.3 billion, down 7% year over year. Operating revenues (excluding fuel) summed $1.2 billion, down 3% year over year. Segmental results were affected by fall in commercial rental revenues, thanks to weak demand and lower fuel services revenues. Commercial rental revenues and fuel services revenues fell 7% and 29%, respectively, from the year-ago quarter’s figures. However, ChoiceLease revenues inched up 1% year over year. Dedicated Transportation Solutions (DTS): Total revenues amounted to $301 million, down 13% from the year-ago quarter’s figure. The decline in DTS’ total revenues was primarily caused by lower contractual sales in late 2019 and early 2020. Operating revenues (excluding fuel and subcontracted transportation) fell 4% to $231 million. Supply Chain Solutions (SCS): Total revenues in the segment were $711 million, up 10% year over year. Operating revenues (excluding fuel and subcontracted transportation) rose 8% year over year to $506 million. Segmental results were driven by new business, higher volumes and increased pricing. Other Details
Ryder exited the fourth quarter with cash and cash equivalents of $151.3 million compared with $73.6 million at the end of 2019. The company’s total debt (including current portion) fell to $6,610.2 million at the end of the fourth quarter from $7,924.8 million at the end of 2019.
Full year gross capital expenditures plunged 69.4% year over year to $1.1 billion. The decline in capital expenditures was caused by lower investments in the lease and rental fleets as a result of weak demand. With reduced capital expenditures, free cash flow was $1.6 billion in 2020 against negative free cash flow of $1.1 billion in 2019. Q1 & 2021 Outlook
Ryder expects adjusted EPS for first-quarter 2021 in the range of 50-60 cents per share.
Anticipating low lease sales in 2021, the company estimates full-year gross capital expenditures in the range of $2-$2.3 billion. Free cash flow is estimated in the range of $400-$700 million. Cash generated from operating activities is estimated to be at $2.2 billion. Adjusted return on equity is estimated in the range of 10-11%. Moreover, both total revenue growth and operating revenue growth is anticipated to be in mid-single digits range. The company expects full-year adjusted earnings in the range of $4.15-$4.65 per share. The Zacks Consensus Estimate for 2021 earnings is currently pegged at $4.06. How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
At this time, Ryder has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Ryder has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.