Ryder System, Inc. R delivered third-quarter 2020 earnings per share (excluding 53 cents from non-recurring items) of $1.21 against the Zacks Consensus Estimate of a loss of 43 cents. However, the bottom line declined 20.4% year over year.
Moreover, total revenues of $2,150.6 million beat the Zacks Consensus Estimate of $2,001.9 million but fell 3.3% on a year over basis. The top line declined primarily due to lower fuel revenues.
Ryder System, Inc. Price, Consensus and EPS Surprise
Ryder System, Inc. price-consensus-eps-surprise-chart | Ryder System, Inc. Quote
Fleet Management Solutions (FMS): Total revenues in the segment amounted to $1.3 billion, which dropped 7% year over year. Operating revenues (excluding fuel) summed $1.1 billion, down 3% year over year. Segmental results were affected by fall in commercial rental revenues due to low demand. Commercial rental revenues fell 16% from the year-earlier quarter’s figure. ChoiceLease revenues inched up 2% year over year.
Dedicated Transportation Solutions (DTS): Total revenues amounted to $300 million, down 17% from the year-ago quarter’s figure. The decline in DTS’ total revenues was primarily due to non-renewed business and lower volumes. Operating revenues (excluding fuel and subcontracted transportation) fell 6% to $234 million.
Supply Chain Solutions (SCS): Total revenues in the segment were $685 million, up 11% year over year. Operating revenues (excluding fuel and subcontracted transportation) rose 9% year over year to $492 million. Segmental results were driven by new business, higher volumes, and favorable pricing.
Ryder, carrying a Zacks Rank #2 (Buy), exited the quarter with cash and cash equivalents of $684.2 million compared with $73.6 million at the end of 2019. The company’s total debt fell to $7,436.6 million at the end of the third quarter from $7,924.8 million at the end of 2019. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Year-to-date gross capital expenditures plunged 73.3% year over year to $0.8 billion. The decline in capital expenditures was due to lower investments in the lease and rental fleets as a result of reduced demand thanks to the coronavirus outbreak. With reduced capital expenditures, free cash flow was $1.2 billion in the year-to-date period against negative free cash flow of $964.6 million in the year-ago quarter.
Anticipating low lease sales in 2020, the company estimates full-year gross capital expenditures in the range of $1-$1.1 billion, compared with previous forecast of$1-$1.3 billion. This reduction in capital expenses is estimated to generate free cash flow of $1.4-$1.5 billion in 2020, against negative free cash flow of $1.1 billion in the prior-year period. Operating cash flow is estimated between $2 billion and $2.1 billion in the current year. Additionally, in the fourth quarter Ryder expects to resume its anti-dilutive share repurchase program which was temporarily paused due to COVID-19.
Apart from Ryder, let’s take a look at some other Zacks Transportation sector’s third-quarter earnings like Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and United Airlines Holdings, Inc. UAL.
Delta incurred a loss (excluding $5.17 from non-recurring items) of $3.30 per share in the September quarter, wider than the Zacks Consensus Estimate of a loss of $3.14. With the health peril showing no signs of subsiding, passenger revenues continued to be weak in the September quarter as well with a plunge of 83% year over year to $1,938 million.
J.B. Hunt reported mixed third-quarter 2020 results, with earnings missing estimates and revenues beating the same. Quarterly earnings of $1.18 per share fell short of the Zacks Consensus Estimate of $1.26. Moreover, the bottom line declined 15.7% year over year due to disappointing performance of its intermodal (JBI) unit. Total operating revenues increased 4.6% to $2,472.5 million. Revenues also beat the consensus mark of $2,345.2 million.
United Airlines incurred a loss (excluding $1.83 from non-recurring items) of $8.16 per share, wider than the Zacks Consensus Estimate of a loss of $7.63. Results were hurt by the coronavirus-induced weakness in air-travel demand. Moreover, operating revenues of $2,489 million slumped 78.1% year over year and lagged the Zacks Consensus Estimate of $2,570.1 million. This year-over-year plunge was due to an 84.3% drop in passenger revenues to $1,649 million.
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