Ryder System Inc.
), one of the world's largest providers of integrated logistics and
transportation solutions, reported second-quarter 2014 adjusted
earnings of $1.44 per share. The bottom line surpassed the Zacks
Consensus Estimate of $1.39 and escalated 15% from $1.25 in the
year-ago quarter driven by growth in the Fleet Management Solutions
The company registered revenues of $1,684.6 million in the
second quarter, up 5% year over year and also above the Zacks
Consensus Estimate of $1,677 million.
Operating revenues (total revenue less Fleet Management
Solutions fuel and all subcontracted transportation) increased 6%
year over year to $1,393.0 million. The revenue growth was based on
higher commercial rental revenues, full service lease revenues and
new business wins along with volume expansion in Supply Chain
Fleet Management Solutions
: Total revenue increased 5% year over year to $1.18 billion in the
second quarter buoyed by 13% growth in commercial rental revenues.
Operating revenues moved up 6% year over year to $907.9
Supply Chain Solutions
: Total revenue was $627.6 million, up 5% from the year-ago period.
Operating revenues (excluding subcontracted transportation) grew 6%
year over year to $545.4 million. The growth was driven by higher
volumes and business wins, in areas like industrial goods, consumer
packaged goods and retail along with technology industry.
Liquidity and Capital Expenditure
Ryder System ended the year with cash and cash equivalents of
$86.9 million compared with $61.6 million at year-end 2013. The
company had long-term debt of $ 4,159.5 million, representing
leverage ratio of 240%. Cash from operations was $537 million, down
4.8% year over year due to increased working capital outflows. Net
capital expenditure amounted to $1.2 billion versus $948 million in
the year-ago quarter.
For the third quarter of 2014, the company expects earnings in
the range of $1.58 to $1.63 per share. For 2014, Ryder raises
earnings per share estimate to $5.50 to $5.60 per share, up from
the previous estimate of $5.40 to $5.55 per share.
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 help
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 with Zacks Rank #2 in this sector include
FLY Leasing Limited
Greenbrier Companies, Inc.
CAI International Inc.
). While and Greenbrier boast a Zacks Rank #1 (Strong Buy), CAI
Internationalholds a Zacks Rank #2.
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