Ryder (R) Q1 Earnings & Revenues Beat, 2022 EPS View Upbeat
Ryder System’s R first-quarter 2022 earnings (excluding 24 cents from non-recurring items) of $3.59 per share surpassed the Zacks Consensus Estimate of $2.38. The bottom line increased more than 100% year over year on the back of higher revenues.
Total revenues of $2,853.9 million also outperformed the Zacks Consensus Estimate of $2,578.7 million. The top line increased 28.5% year over year on strong segmental performances.
Ryder System, Inc. Price, Consensus and EPS Surprise
Ryder System, Inc. price-consensus-eps-surprise-chart | Ryder System, Inc. Quote
Segmental Results
Fleet Management Solutions: Total revenues of $1,529 million were up 15% year over year. Operating revenues (excluding fuel and lease liability insurance revenues) summed $1,282 million, up 10% year over year. Segmental revenues benefited from higher rental revenues on the back of strong demand and favorable pricing. Revenues increased on higher fuel pricing as well. Within the segment, commercial rental revenues increased 40% year over year while fuel services and ChoiceLease liability insurance revenues jumped 48%. ChoiceLease revenues inched up 1% while SelectCare and other revenues climbed 13%.
Dedicated Transportation Solutions: Total revenues amounted to $425 million, up 33% from the year-ago quarter’s figure. Operating revenues (excluding fuel and subcontracted transportation) climbed 25% to $296 million. The revenue uptick was driven by new business and favorable pricing.
Supply-Chain Solutions: Total revenues in the segment were $1,089 million, up 54% year over year. Operating revenues (excluding fuel and subcontracted transportation) rose 47% year over year to $738 million on the back of revenue growth in all industry verticals.
Other Details
Ryder, currently carrying a Zacks Rank #2 (Buy), exited the first quarter with cash and cash equivalents of $221.9 million compared with $234 million at the end of 2021. R’s total debt (including the current portion) rose to $6,780.8 million at the end of the first quarter from $6,579.7 million reported at the end of 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
During the March quarter, gross capital expenditures increased to $662 million, up 62.7% year over year due to higher planned investments in the lease fleet. Free cash flow in the reported quarter was $107.7 million, down 55.4% year over year.
Q2 EPS Outlook
For the second quarter of 2022, Ryder expects its adjusted earnings per share (EPS) in the range of $3.50-$3.75. The Zacks Consensus Estimate for the same is pegged at $3.01.
2022 Outlook
Ryder now expects total revenues and operating revenues to increase approximately 17% and 14%, respectively, in 2022 (previous view: both were expected to rise 10%).
Adjusted EPS for the full year is now estimated in the range of $13.00-$14.00 (previous outlook: $11.00-$12.00). The Zacks Consensus Estimate for the same is pegged at $11.70. Per Ryder’s chairman and CEO Robert Sanchez, "Looking ahead, we've increased our 2022 ROE and comparable EPS forecasts reflecting continued momentum in FMS. Our forecast continues to anticipate that the very strong used vehicle sales and rental market environment will moderate in the second half of the year, with slower freight growth partially offset by ongoing vehicle production constraints”.
R expects free cash flow in the range of $550-$650 million (previous view: $200-$300 million) in 2022.
Adjusted ROE (return on investment) is expected to be 23-25%.
Earnings Snapshots
Within the broader Transportation sector, J.B. Hunt Transport Services JBHT, CSX Corporation CSX and United Airlines UAL recently reported first-quarter 2022 results.
J.B. Hunt reported better-than-expected first-quarter 2022 earnings numbers. Quarterly earnings of $2.29 per share surpassed the Zacks Consensus Estimate of $1.91. The bottom line surged 67.2% year over year on higher revenues across all segments.
Total operating revenues of $3,488.6 million also outperformed the Zacks Consensus Estimate of $3,260.5 million. The top line jumped 33.3% year over year. JBHT currently carries a Zacks Rank #3 (Hold).
CSX Corp’s first-quarter 2022 earnings of 39 cents per share beat the Zacks Consensus Estimate by a penny despite the decrease in overall volumes as supply-chain issues continue to dent results. The bottom line improved 25.81% year over year owing to higher revenues, aided by increased shipping rates.
Total revenues of $3,413 million outperformed the Zacks Consensus Estimate of $3291.2 million. The top line increased 21.33% year over year. CSX carries a Zacks Rank of 3 at present.
United Airlines incurred a loss of $4.24 per share in the first quarter of 2022, wider than the Zacks Consensus Estimate of a loss of $4.19. This is the ninth consecutive quarterly loss suffered by UAL as coronavirus concerns continue to weigh on air-travel demand.
Operating revenues of $7,566 million also fell short of the Zacks Consensus Estimate of $7,657.2 million. UAL is presently Zacks #3 Ranked.
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