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Ryder (R) Shares Gain More Than 3% Since Q2 Earnings Release

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Shares of Ryder System (R - Free Report) have gained 3.8% since its second-quarter 2021 earnings release on Jul 28, primarily due to its better-than-expected results.

Ryder’s earnings (excluding 37 cents from non-recurring items) of $2.40 per share surpassed the Zacks Consensus Estimate of $1.33. In the year-ago period, the company had incurred a loss of 95 cents per share due to coronavirus-led woes.

Total revenues of $2,382.2 million also outperformed the Zacks Consensus Estimate of $2,219.9 million. The top line increased 26% year over year due to strong performances across all segments.

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 in the segment amounted to $1,408 million, up 18% year over year. Operating revenues (excluding fuel and lease liability insurance revenues) summed $1,225 million, up 14% year over year. Segmental results benefited from higher rental and ChoiceLease revenues, as well as from higher fuel pricing. While commercial rental revenues increased 58% year over year, fuel services revenues jumped 57%. ChoiceLease revenues climbed 5%, while SelectCare revenues rose 8%.

Dedicated Transportation Solutions (DTS): Total revenues amounted to $335 million, up 21% from the year-ago quarter’s figure. The performance was driven by new business and higher volumes. Operating revenues (excluding fuel and subcontracted transportation) increased 12% year over year to $256 million.

Supply Chain Solutions (SCS): Total revenues in the segment were $776 million, up 49% year over year. Operating revenues (excluding fuel and subcontracted transportation) rose 32% year over year to $535 million. Segmental results were driven by new business and higher volumes.

Other Details

Ryder, carrying a Zacks Rank #3 (Hold), exited the second quarter with cash and cash equivalents of $268 million compared with $151.3 million at the end of 2020. The company’s total debt (including current portion) fell to $6,235.7 million at the end of the second quarter from $6,610.2 million at the end of 2020.

During the first half of 2021, gross capital expenditures increased to $963 million compared with $597 million in the year-ago period due to higher investments on rental fleet. Free cash flow in the period was $602 million, down from $612 million in the first half of 2020. The decline was due to increase in cash paid for capital expenditures.

2021 Earnings View Increased

As the economy continues to recover, Ryder anticipates freight market conditions to remain strong into 2022. Owing to this, coupled with the expectations of improved used vehicle sales, higher pricing in lease and commercial rental businesses, as well as strong demand in commercial rental, the company has raised its current-year earnings per share guidance. It now estimates adjusted earnings per share in the range of $7.20-$7.50, compared with the previously guided range of $5.50-$5.90. The Zacks Consensus Estimate for the same stands at $5.91.

Free cash flow is predicted between $650 million and $750 million in 2021, compared with $400-$700 million expected previously. Cash flow from operating activities is forecast to be $2.2 billion in the current year.

Capital expenditures are predicted to be in the range of $2.2-$2.3 billion (previous guidance: $2-$2.3 billion) in the current year.

For the third quarter, Ryder anticipates adjusted earnings per share in the band of $1.95-$2.05. The Zacks Consensus Estimate for the same is pegged at $1.68.

Sectorial Snapshot

Let’s take a look at some of the other recently released earnings reports from companies within the Zacks Transportation sector

Knight-Swift Transportation Holdings (KNX - Free Report) , carrying a Zacks Rank #2 (Buy), reported second-quarter 2021 earnings (excluding 6 cents from non-recurring items) of 98 cents per share, surpassing the Zacks Consensus Estimate of 87 cents. Total revenues of $1,315.7 million also outperformed the Zacks Consensus Estimate of $1,300.8 million. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

United Parcel Service (UPS - Free Report) , carrying a Zacks Rank #3, reported second-quarter 2021 earnings (excluding a penny from non-recurring items) of $3.06 per share, beating the Zacks Consensus Estimate of $2.75. Quarterly revenues of $23,424 million also outperformed the Zacks Consensus Estimate of $23,085.4 million.

Ryanair Holdings (RYAAY - Free Report) , carrying a Zacks Rank #4 (Sell), incurred a loss of $1.46 per share in the first quarter of fiscal 2022 (ended Jun 30, 2021), narrower than the Zacks Consensus Estimate of a loss of $1.50. Quarterly revenues of $446.4 million fell short of the Zacks Consensus Estimate of $459 million.