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Ryder (R) Down 1.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Ryder (R - Free Report) . Shares have lost about 1.3% 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 drivers.
Second quarter earnings
Ryder System's second-quarter 2018 earnings (excluding 62 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate of $1.29. The bottom line also increased 42% on a year-over-year basis. Results were aided by higher revenues.
Total revenues came in at $2,089.3 million, outpacing the Zacks Consensus Estimate of $1,983 million. The reported figure improved 16.5% on a year-over-year basis with growth across all segments. As the company is investing significantly on its lease and rental fleets capital expenditures (net) in the first half of 2018 rose more than 60% to $1,421.3 million. On a year-to-date basis, operating cash flow totalled $820 million, up 12%.
Segmental Results
Fleet Management Solutions (FMS): Total revenues amounted to $1.30 billion, up 11% year over year. Operating revenues (excluding fuel) came in at $1.08 billion, up 8% year over year. Increase in commercial rental and ChoiceLease revenues drove segmental performance. ChoiceLease revenues were up 6% as well.
Dedicated Transportation Solutions (DTS): Total revenues summed $331 million, up 21% from the year-ago quarter. Operating revenues (excluding fuel and subcontracted transportation) rose 7% year over year to $214 million on the back of volume growth among other factors.
Supply Chain Solutions (SCS): Total revenues were $605 million, up 30% year over year. Operating revenues (excluding fuel and subcontracted transportation) improved 20% year over year to $430 million. Segmental results were aided by volume growth and the acquisition of MXD Group, which was completed in April.
Liquidity
The company exited the second quarter with cash and cash equivalents of $73.6 million compared with $78.3 million at the end of 2017. The company had total debt of $5,977.7 million compared with $5,409.7 million at 2017 end.
Q3 Outlook
Ryder expects adjusted earnings per share of $1.55-$1.65 in third-quarter 2018 compared with $1.34 reported in the year-ago period.
Upbeat 2018 Outlook
For 2018, Ryder raised its earnings outlook and anticipates adjusted earnings per share of $5.62-$5.82 compared with $5.45-$5.70 projected earlier. This upside can be attributed to the company’s expectations of healthy improvements in rental, supply chain, and dedicated businesses.
Further, the company expects organic lease fleet growth of 8,500 vehicles for the full year, an increase of 2,000 units from the past projection.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Ryder has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
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 #2 (Buy). We expect an above average return from the stock in the next few months.
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Ryder (R) Down 1.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Ryder (R - Free Report) . Shares have lost about 1.3% 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 drivers.
Second quarter earnings
Ryder System's second-quarter 2018 earnings (excluding 62 cents from non-recurring items) of $1.42 per share surpassed the Zacks Consensus Estimate of $1.29. The bottom line also increased 42% on a year-over-year basis. Results were aided by higher revenues.
Total revenues came in at $2,089.3 million, outpacing the Zacks Consensus Estimate of $1,983 million. The reported figure improved 16.5% on a year-over-year basis with growth across all segments. As the company is investing significantly on its lease and rental fleets capital expenditures (net) in the first half of 2018 rose more than 60% to $1,421.3 million. On a year-to-date basis, operating cash flow totalled $820 million, up 12%.
Segmental Results
Fleet Management Solutions (FMS): Total revenues amounted to $1.30 billion, up 11% year over year. Operating revenues (excluding fuel) came in at $1.08 billion, up 8% year over year. Increase in commercial rental and ChoiceLease revenues drove segmental performance. ChoiceLease revenues were up 6% as well.
Dedicated Transportation Solutions (DTS): Total revenues summed $331 million, up 21% from the year-ago quarter. Operating revenues (excluding fuel and subcontracted transportation) rose 7% year over year to $214 million on the back of volume growth among other factors.
Supply Chain Solutions (SCS): Total revenues were $605 million, up 30% year over year. Operating revenues (excluding fuel and subcontracted transportation) improved 20% year over year to $430 million. Segmental results were aided by volume growth and the acquisition of MXD Group, which was completed in April.
Liquidity
The company exited the second quarter with cash and cash equivalents of $73.6 million compared with $78.3 million at the end of 2017. The company had total debt of $5,977.7 million compared with $5,409.7 million at 2017 end.
Q3 Outlook
Ryder expects adjusted earnings per share of $1.55-$1.65 in third-quarter 2018 compared with $1.34 reported in the year-ago period.
Upbeat 2018 Outlook
For 2018, Ryder raised its earnings outlook and anticipates adjusted earnings per share of $5.62-$5.82 compared with $5.45-$5.70 projected earlier. This upside can be attributed to the company’s expectations of healthy improvements in rental, supply chain, and dedicated businesses.
Further, the company expects organic lease fleet growth of 8,500 vehicles for the full year, an increase of 2,000 units from the past projection.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Ryder has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
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 #2 (Buy). We expect an above average return from the stock in the next few months.