Ryder System Inc.
), one of the world's largest providers of integrated logistics
and transportation solutions, reported first-quarter 2014
adjusted earnings of 92 cents per share. The bottom line
surpassed the Zacks Consensus Estimate of 87 cents and escalated
16% from 79 cents in the year-ago quarter driven by growth in the
Fleet Management Solutions segment.
The company registered revenues of $1,610.7 million in the
first quarter, up 3% year over year but below the Zacks Consensus
Estimate of $1,628 million.
Operating revenues (total revenue less Fleet Management
Solutions fuel and all subcontracted transportation) increased 4%
year over year to $1,322.5 million. The growth was driven by
increased full service lease revenues and commercial rental
revenue. In addition, growth in new business and higher volumes
in Supply Chain Solutions also supported revenue growth.
Fleet Management Solutions
: Total revenue increased 3% year over year to $1.14 billion in
the first quarter buoyed by 10% growth in commercial rental
revenues. Operating revenues moved up 4% year over year to $859.9
Supply Chain Solutions
: Total revenue was $597.3 million, up 4% from the year-ago
period. Operating revenues (excluding subcontracted
transportation) grew 5% year over year to $520.4 million. The
growth was driven by higher volumes and business wins.
Liquidity and Capital Expenditure
Ryder System ended the year with cash and cash equivalents of
$72.8 million compared with $61.6 million at year-end 2012. The
company had long-term debt of $ 4,045.8 million, representing
leverage ratio of 234%. Cash from operations was $238 million,
down 4.4% year over year due to increased working capital
outflows. Net capital expenditure amounted to $468 million versus
$336 million in the year-ago quarter.
For the second quarter of 2014, the company expects earnings
in the range of $1.35 to $1.40 per share. For 2014, Ryder
maintains earnings per share estimate of $5.30 to $5.45, up 9% to
12% from $4.88 per earned in 2013.
We believe the company's growth trajectory hinges on
improvement in lease fleet and used vehicle sale. Further, Ryder
is experiencing an improvement in fleet age, implying further
renewals and organic fleet growth. In addition, the company's
efforts in deploying a fuel-efficient fleet remain industry
leading and strengthen its foothold in the rapidly growing market
for environmentally friendly vehicles.
Despite these positives, the company faces certain headwinds
that may limit its near-term growth. These include unstable
economic conditions, heavy capital expenditures, stiff
competition and federal regulations.
Zacks Rank and Other Stocks
Ryder System currently has a Zacks Rank #2 (Buy).
Other stocks to consider in this sector include
Trinity Industries Inc.
American Railcar Industries, Inc.
CAI International Inc.
). While Trinity Industries and AmericanRailcar boast a Zacks
Rank #1 (Strong Buy), CAI Internationalholds a Zacks Rank #2.
AMER RAILCAR (ARII): Free Stock Analysis
CAI INTL INC (CAP): Free Stock Analysis
RYDER SYS (R): Free Stock Analysis Report
TRINITY INDS IN (TRN): Free Stock Analysis
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