A month has gone by since the last earnings report for Ryder (R Quick QuoteR - Free Report) . Shares have lost about 2.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ryder due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Ryder Incurs Loss in Q1

Ryder reported first-quarter 2020 loss (excluding 72 cents from non-recurring items) of $1.38 per share, wider than the Zacks Consensus Estimate of a loss of 85 cents. Notably, the company had reported earnings of $1.11 in the year-ago quarter. Results were hurt primarily due to softening of rental demand. Total revenues amounted to $2,161.3 million, which beat the Zacks Consensus Estimate of $2,111.7 million. However, the top line dropped 0.9% year over year.

Segmental Results

Fleet Management Solutions (FMS): Total revenues in the segment amounted to $1.3 billion, which dropped 1% year over year. Operating revenues (excluding fuel) summed $1.2 billion, up 2% year over year. Segmental results were affected by lower commercial rental performance due to lower demand. Commercial rental revenues fell 13% from the year-earlier quarter’s figure. Notably, the lease fleet increased 3% compared with the prior-year quarter’s levels.

Dedicated Transportation Solutions (DTS): Total revenues amounted to $335 million, down 4% 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) slightly rose to $237 million backed by higher pricing and volumes.

Supply Chain Solutions (SCS): Total revenues in the segment were $628 million, down 1% year over year. Operating revenues (excluding fuel and subcontracted transportation) declined 2% year over year to $467 million. Segmental results were hurt primarily by previously-announced lost business and COVID-19 related volume reductions in the automotive sector.

Liquidity

Ryder exited the year with cash and cash equivalents of $397.2 million compared with $73.6 million at the end of 2019. The company’s total debt rose 3.1% to $8.17 billion.
 
As the company is cancelling and deferring lease as well as rental fleets owing to the COVID-19 pandemic, capital expenditures (net) fell 71% year over year to $289 million. Lower capital expenditures reflect lower planned investments to grow as well as reinvigorate the lease and rental fleets. Owing to reduced vehicle capital expenditures, free cash flow amounted to $110.6 million. Increase in free cash flow boosts investors’ optimism since it is used to finance debt and reward shareholders. Operating cash flow for March end quarter was $439 million, down 9.5% year over year.

Suspends 2020 Guidance

Owing to the uncertainty related to the magnitude and duration of COVID-19 crisis, Ryder has suspended its 2020 earnings guidance.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -28.72% due to these changes.

VGM Scores

At this time, Ryder has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ryder has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.