Ryder Reports Slight Revenue Decline for Q3
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Ryder System Inc. experienced a slight decline in year-over-year revenue amid market headwinds during the third quarter of 2023, the company reported Oct. 25.
The Miami-based transportation and logistics company posted net earnings of $161 million, or $3.47 a diluted share, for the three months ending Sept. 30. That compared with $246 million, or $4.82, during the same time the previous year. Total revenue decreased by 3.7% to $2.92 billion from $3.04 billion.
“Our strong third-quarter performance and increased 2023 guidance demonstrate the ongoing effectiveness of our balanced growth strategy despite a challenging freight environment,” Ryder CEO Robert Sanchez said. “All three business segments achieved their pretax earnings targets during the quarter.”
Ryder has been working to decrease its business model risks and enhance returns. Sanchez noted these efforts are contributing to significant outperformance for the business when compared to prior cycles. He noted it also has provided additional opportunities to increase shareholder value and drive profitable growth.
He pointed to a recent acquisition as an example.
“Our recently announced agreement to acquire Impact Fulfillment Services supports our strategy to accelerate growth in our supply chain business,” Sanchez said. “The transaction is set to add contract packaging and manufacturing capabilities that complement our existing suite of port-to-door logistics services, allowing us to expand with existing customers while adding new brands to our extensive customer base.”
Sanchez also noted that enhanced asset management is leading to improved returns. Ryder reduced its tractor rental fleet by 18% year-over-year to align with lower market demand by redeploying vehicles into longer-term lease, dedicated and supply chain applications. The company also is expanding its retail sales capacity, which has allowed it to sell a higher number of used vehicles through retail channels and maximize proceeds.
“The stronger earnings profile of the business and our disciplined capital allocation provide ample capacity for organic growth, strategic acquisitions and returning capital to shareholders through share repurchases and dividends,” Sanchez said. “Our board recently authorized new discretionary and anti-dilutive share repurchase programs as well as payment of our 189th consecutive quarterly dividend, demonstrating that returning capital to shareholders continues to be a key priority for us.”
The company’s fleet management solutions segment experienced a year-over-year decrease in Q3 revenue of 6% to $1.49 billion from $1.58 billion. Business earnings for the segment decreased 36% to $169 million from $266 million. The report noted that the segment experienced strong earnings despite weaker used vehicle sales and rental market conditions. ChoiceLease, SelectCare and commercial rental are among the services covered by the segment.
The supply chain solutions segment reported that revenue decreased 1% to $1.19 billion from $1.21 billion. Business earnings for the segment increased 14% to $81 million from $71 million. The report noted that the higher earnings primarily reflect operating revenue growth.
The dedicated transportation solutions segment saw revenue decrease by 2% to $448 million from $455 million. Business earnings for the segment increased 3% to $325 million from $317 million. The report noted that the earnings results were strong despite weak freight conditions.
Ryder Supply Chain Solutions ranks No. 10 on the Transport Topics Top 100 list of the largest logistics companies in North America and No. 9 on the for-hire TT 100.
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