Ryder System, Inc .'s R third-quarter 2018 earnings (excluding 4 cents from non-recurring items) of $1.64 per share surpassed the Zacks Consensus Estimate of $1.63. The bottom line also increased significantly year over year. Results were aided by higher revenues and lower tax rates.
Total revenues came in at $2,158.1 million, above the Zacks Consensus Estimate of $2,110.7 million. The top line also improved year over year with growth across all segments. As the company is investing significantly on its lease and rental fleets, capital expenditures (net) during the first nine months of the year soared more than 64% to $2.3 billion. On a year-to-date basis, operating cash flow totaled $1.21 billion, up 3.4%.
Fleet Management Solutions (FMS): Total revenues amounted to $1.34 billion, up 12% year over year. Operating revenues (excluding fuel) summed $1.12 billion, up 9% year over year. Increase of 19% and 6%, each in commercial rental and ChoiceLease revenues, drove this segmental performance.
Dedicated Transportation Solutions (DTS): Total revenues summed $341 million, up 25% from the year-ago quarter. Operating revenues (excluding fuel and subcontracted transportation) rose 12% to $222 million on the back of volume growth among other factors.
Supply Chain Solutions (SCS): Total revenues were $629 million, up 29% year over year. Operating revenues (excluding fuel and subcontracted transportation) improved 23% year over year to $463 million. Segmental results were boosted by volume growth and the acquisition of MXD Group, completed in April this year.
Ryder System, Inc. Price, Consensus and EPS Surprise
The company exited the third quarter with cash and cash equivalents of $60.7 million compared with $78.3 million at the end of 2017. The company had total debt of $6,283.1 million compared with $5,409.7 million at 2017 end.
Q4 & 2018 Outlook
For the fourth quarter, Ryder expects adjusted earnings per share of $1.75-$1.85. The Zacks Consensus Estimate for the same stands at $1.80 per share, much lower than the high end of the guided range. It seems the company's guidance disappointed investors. Consequently, shares of the company declined more than 6% at the close of business on Oct 26 despite its outperformance on both earnings and revenue front.
For the full year, the company anticipates adjusted earnings per share of $5.72-$5.82. Previous view was in the range of $5.62-$5.82. The company reported earnings per share of $4.53 in 2017. This raised guidance can be attributed to the company's expectations of healthy improvements in rental, supply chain and dedicated businesses. The Zacks Consensus Estimate for full-year earnings is pegged at $5.76 per share.
This Zacks Rank #3 (Hold) company's projection for ChoiceLease fleet growth remains unaltered at 8,500 vehicles for 2018. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Investors interested in the broader Zacks Transportation sector are keenly awaiting third-quarter earnings reports from key players, namely SkyWest, Inc. SKYW , C.H. Robinson Worldwide, Inc. CHRW and Triton International Limited TRTN . While SkyWest and C.H. Robinson will report third-quarter earnings on Oct 30, Triton International will release the same on Nov 2.
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