Ryder System’s (R - Free Report) second-quarter 2019 earnings (excluding 3 cents from non-recurring items) of $1.4 per share came in line with the Zacks Consensus Estimate. However, the bottom line declined year over year due to below-par used vehicle sales.
Total revenues amounted to $2,245 million, which lagged the Zacks Consensus Estimate of $2,255.5 million. The top line, however, increased 7.5% year over year.
More than the revenue miss and the year-over-year earnings contraction, the company’s bearish bottom-line projections for third-quarter and full-year 2019 disappointed investors. Consequently, the stock declined 10% to $53.38 per share on Jul 30.
For third-quarter 2019, the company anticipates adjusted earnings per share between $1.45 and $1.60 compared with $1.67 registered a year ago. The Zacks Consensus Estimate for third-quarter earnings is pegged higher at $1.74.
For 2019, Ryder, carrying a Zacks Rank #3 (Hold), anticipates adjusted earnings per share between $5.50 and $5.80 (earlier view: $6.05 to $6.35). The Zacks Consensus Estimate for full-year earnings is pegged higher at $6.15. The company trimmed its 2019 earnings guidance as it expects weakness pertaining to used vehicle sales to persist during the current year.
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Fleet Management Solutions (FMS): Total revenues at this segment amounted to $1.39 billion, which rose 7% year over year. Operating revenues (excluding fuel) summed $1.18 billion, up 9% year over year. Segmental results were driven by larger average fleet size and favorable pricing of new vehicles. Notably, the lease fleet increased sequentially by 3,800 vehicles.
Dedicated Transportation Solutions (DTS): At this segment, total revenues summed $362.2 million, up 10% from the year-ago quarter. Operating revenues (excluding fuel and subcontracted transportation) rose 16% to $248.1 million backed by the expansion of the customer base among other factors.
Supply Chain Solutions (SCS): Total revenues at this segment were $649.3 million, which increased 7% year over year. Operating revenues (excluding fuel and subcontracted transportation) improved 12% year over year to $483 million. Segmental results were driven by volume growth, favorable pricing and other factors.