Ryder System, Inc. (R) Earnings & Analysis

Latest quarter

Ryder reported third-quarter revenue of $3.4 billion, up from $3.2 billion a year earlier. Revenue exceeded the consensus by 1.02%, although both the reported figure and estimate round to $3.4 billion. Adjusted earnings per share of $4.33 also beat the consensus estimate of $4.17. Diluted earnings per share rose to $4.15 from $3.32 a year earlier.

Ryder attributed revenue growth partly to contractual business in Fleet Management Solutions and Supply Chain Solutions, as well as higher fuel prices passed through to customers. Its filing said Dedicated Transportation Solutions’ operating revenue fell as a lower fleet count offset higher pricing. Pretax earnings increased in fleet management and supply chain but declined in dedicated transportation.

The company reported a gross margin of 20.0%, compared with 21.0% a year earlier, while operating margin rose to 8.80% from 8.67%. Ryder said costs associated with starting new supply chain business rose slightly faster than services revenue. Quarterly free cash flow increased to $309.0 million from $35.0 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO John Diez said sales activity accelerated in leasing and dedicated transportation as customers sought capacity and faced driver, insurance and equipment costs. He said lease customers were also driving more miles per vehicle. Diez described the freight market as being in the early stages of recovery, while noting that geopolitical and macroeconomic factors could affect its pace and durability.

CFO Cristy Gallo-Aquino said fleet management earnings benefited from lease initiatives, improved used vehicle sales and rental performance. Used vehicle prices rose from a year earlier, and the retail channel accounted for a greater share of sales. Ryder sold 5,100 used vehicles during the quarter, while inventory declined to 7,300 vehicles, she said.

On margins, Gallo-Aquino said supply chain earnings benefited from higher volumes in e-commerce fulfillment and last-mile delivery, partly offset by the productivity of new business ramping up and lower automotive results. She said dedicated transportation earnings fell partly because of lower operating revenue and a prior-year insurance benefit.

Asked about driver wage pressure, Steve Sensing, president of supply chain and dedicated transportation, said increases were concentrated in certain regions. He said customer contracts include annual inflation provisions and wage indices that allow Ryder to reopen discussions when wages change sharply, although recovery is not always immediate.

Asked when sales would translate into fleet growth, fleet management president Tom Havens said lease orders take time to enter the fleet, while maintenance contracts can transition more quickly. Havens said Ryder had placed rental orders ahead of expected demand and added: “We would expect that momentum to continue to carry into 2027 and see, in 2027, all three product lines with fleet increases.”

Diez said some customers were returning to dedicated services after using truckload capacity, and that private fleet conversions were accelerating. Gallo-Aquino said organic growth remained the company’s first capital-allocation priority.

Guidance

Diez said Ryder raised its full-year 2026 comparable earnings forecast to $14.85–$15.05 per share, citing third-quarter performance and expected benefits from used vehicle sales and rental. He also said the company raised its return-on-equity forecast.

Gallo-Aquino said Ryder increased its 2026 rental capital expenditure forecast to $500.0 million and reduced its lease spending forecast to $1.7 billion, reflecting the timing of lease sales activity. Diez said Ryder also increased its forecast for benefits from the market upturn.