Why Is Transport Company Ryder System Trading Lower Today?

Ryder System, Inc. R reported a fourth-quarter fiscal 2023 revenue decline of 2% year-on-year to $3.02 billion, beating the consensus of $2.98 billion.

Operating revenue increased by 2% to $2.447 billion. Adjusted EPS of $2.95, down from $3.89 a year ago, beat the consensus of $2.73.

Revenue from Fleet Management Solutions decreased by 7% to $1.481 billion, Supply Chain Solutions rose 4% to $1.301 billion, and Dedicated Transportation Solutions fell by 3% to $443 million.

Net cash provided by operating activities from continuing operations for the fiscal year totaled $2.4 billion, and free cash flow was negative $(54) million.

Ryder System held $204 million in cash and equivalents at the end of the quarter.

As of December 31, 2023, debt-to-equity was 232%, compared to 216% at year-end 2022, and remains below the company’s long-term target of 250% to 300%.

“While the freight environment remained challenging, the transformative actions we’ve taken to de-risk the model, enhance returns, and drive profitable growth have meaningfully improved business model resilience. Our ability to generate ROE of 19% against the backdrop of weakening market conditions in used vehicle sales and rental demonstrates the effectiveness of these changes,” commented Ryder Chairman and CEO Robert Sanchez.

2024 Outlook: Ryder expects adjusted EPS of $11.50-$12.50 versus the $11.91 estimate. The company sees total revenue growth of ~13% YoY.

The company expects net cash from operating activities from continuing operations of ~2.4 billion for 2024 and capital expenditures of ~$3.3 billion.

Q1 Outlook: The company sees adjusted EPS of $1.55 – $1.80, below the consensus of $2.68.

Price Action: R shares are trading lower by 6.37% at $110.96 on the last check Wednesday.