Ryder Q4 Profit Slides on Weak Used Truck Prices, Rentals
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Profits at Ryder System Inc. fell 39.8% in the fourth quarter of 2023 as weak freight conditions again sapped strength from used vehicle sales prices and rental activity, it said Feb. 14.
The company posted a profit of $124 million, or $2.74 per diluted share, in the three months that ended Dec. 31, down 39.8% compared with a profit of $206 million, or $4.18, in the same period a year earlier.
Ryder’s diluted earnings per share from continuing operations in Q4 were $2.95, compared with $3.89 in the final three months of 2022.
Miami-based Ryder’s Q4 revenue totaled $3.023 billion, down 2% compared with $3.088 billion in the year-ago period.
The company’s fleet management solutions division posted a 7% decrease in revenue in Q4 to $1.481 billion from $1.595 billion in the same quarter a year before. The unit’s decline in revenue was the result of lower rental demand, the company said, as well as 33% and 39% decreases in used truck and trailer prices, respectively. Among the segments of the division are used vehicle sales, ChoiceLease, the SelectCare maintenance business and commercial rental.
December’s used Class 8 truck average retail sales price decreased 27.6% year-over-year to $57,975 from $80,071, according to ACT Research.
Ryder’s supply chain solutions division reported a 4% increase in revenue to $1.301 billion from $1.251 billion a year earlier. Organic growth from new business, price increases and an increase in volumes, as well as the acquisition of Impact Fulfillment Services boosted the unit’s revenues, Ryder said. Impact Fulfillment Services was acquired in October.
The company’s dedicated transportation solutions unit posted a 3% decline in revenue to $443 million from $456 million in Q4 2022. Lower fuel costs and subcontracted transportation passed through to customers hurt the unit’s earnings, the company said.
“Ryder delivered strong results in the fourth quarter and throughout 2023 reflecting continued execution of our balanced growth strategy,” CEO Robert Sanchez said. “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.”
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“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,” Sanchez added.
Full-year revenue came in at $11.8 billion, compared with $12 billion in 2022.
“As part of our balanced growth strategy, we continue to focus on growing our contractual lease, dedicated and supply chain businesses at targeted returns,” Sanchez said. “We’re excited about our acquisition of Cardinal Logistics earlier this month, which will increase scale and network density, driving operating efficiencies and enabling us to provide even greater value to our newly combined customer base.”
Beyond the Cardinal acquisition, Chief Financial Officer John Diez said the company expects used vehicle sales and rental market conditions to remain in a trough, predicting a particularly rough first three months of 2024.
As 2024 progresses, however, Diez said Ryder is expecting an upturn in business across the company.
Ryder Supply Chain Solutions ranks No. 9 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 10 on the TT Top 100 list of the largest logistics companies.
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