Why Transportation & Logistics Company Ryder System's Shares Are Falling Today

Ryder System, Inc. R reported a third-quarter FY23 revenue decline of 4% year-on-year to $2.924 billion, missing the analyst consensus of $2.985 billion.

Adjusted EPS of $3.58 beat the analyst consensus of $3.22.

Revenue from Fleet Management Solutions decreased by 6% to $1.487 billion, Supply Chain Solutions fell 1% to $1.194 billion, and Dedicated Transportation Solutions fell by 1% to $448 million.

Ryder System held $159 million in cash and equivalents as of quarter end. 

Debt-to-equity as of September 30, 2023, was 214%, compared to 216% at year-end 2022, and remains below the company's long-term target of 250% to 300%.

"Our strong third quarter performance and increased 2023 guidance demonstrate the ongoing effectiveness of our balanced growth strategy despite a challenging freight environment," says Ryder Chairman and CEO Robert Sanchez. "ROE of 21% remained above our high-teens target and all three business segments achieved their pre-tax earnings targets during the quarter."

Share Repurchase: The company has authorized two new share repurchase programs. Both programs commenced October 12, 2023, and expire on October 12, 2025.

Under the new discretionary repurchase program, Ryder management is authorized to repurchase up to 2.0 million shares of common stock.

Under the new anti-dilutive repurchase program, Ryder management is authorized to repurchase up to 2.0 million shares of common stock that have been issued to employees under its employee stock plans since August 31, 2023.

Outlook: Ryder raised its FY23 adjusted EPS outlook to $12.60-$12.85 (prior view: $12.20 - $12.70) versus the $12.78 estimate.

R continues to see total revenue growth of ~(2%).

For Q4, the company sees adjusted EPS of $2.60 - $2.85, below the consensus of $2.93.

Price Action: R shares are trading lower by 4.01% at $94.05 on the last check Wednesday.