Ryder System Stock Soars On Q4 Beat, Solid FY22 Outlook

Ryder System, Inc. R reported fourth-quarter revenue growth of 17.5% year-over-year to $2.6 billion, beating the consensus of $2.48 billion.
Operating revenue increased by 14% Y/Y to $2.1 billion.
Adjusted EPS improved to $3.52 from $0.83 in 4Q20, beating the consensus of $2.47.
Revenue by segments: Fleet Management Solutions (FMS) $1.49 billion (+12% Y/Y), Supply Chain Solutions (SCS) $870 million (+22% Y/Y), and Dedicated Transportation Solutions (DTS) $402 million (+33% Y/Y).
Ryder Systems' cash provided by operating activities from continuing operations totaled $2.18 billion in FY21. Free cash flow was $1.06 billion.
The company recorded an adjusted return on equity (ROE) of 20.9%, reflecting strong FMS results. Comparable EBITDA was $629.3 million (+10.9% Y/Y).
"We expect a strong used vehicle sales and rental environment to continue in 2022, slowly moderating in the second half of the year. We plan to continue to benefit from our lease pricing initiative. We also expect our supply chain and dedicated businesses to achieve their high single-digit earnings targets in the second half of the year," said Chairman and CEO Robert Sanchez.
As part of its strategy to improve returns in Fleet Management Solutions (FMS), the company intends to exit the lower return U.K. business over the next 12 to 18 months.
1Q22 Outlook: Ryder expects GAAP EPS of $1.97 - $2.12 and Comparable EPS of $2.20 - $2.35 (consensus $2.03).
FY22 Outlook: The company expects total revenue and operating revenue (non-GAAP) to increase by ~10%; comparable EPS of $11.00 - $12.00, up 15% - 25% year-over-year, versus consensus of $8.95.
The company also intends to enter into a $300 million accelerated share repurchase program.
Price Action: R shares are trading higher by 7.66% at $82.42 on Wednesday.

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