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Ryder reports record Q4 and full-year 2015 results 02 February 2016

Targets solid revenue growth despite a soft freight environment

Ryder System, Inc. has reported fourth quarter and full-year comparable earnings and revenue growth across all business segments. Whilst total revenue decreased 1.0% to US$6.572.0 million, operating revenue increased 6.0% to US$5,561.0 million.Net earnings climbed 40.0% to reach US$304.8 million.

The Company reported record Q4 operating revenue (revenue excluding all fuel and subcontracted transportation), reflecting higher full service lease and commercial rental revenue in Fleet Management Solutions (FMS), new business and increased volumes in Dedicated Transportation Solutions (DTS) and Supply Chain Solutions (SCS), partially offset by negative impacts from foreign exchange. Q4 total revenue increased from the prior year, as higher operating revenue was partially offset by lower fuel prices passed through to customers and negative impacts from foreign exchange.

In the Fleet Management Solutions business segment, operating revenue (revenue excluding fuel) in Q4, 2015 was US$999.4 million, up 7.0% (or 9.0% excluding foreign exchange) compared with the year-earlier period. Total revenue Q4, 2015 was US$1.15 billion, comparable with the same period of 2014, as the operating revenue increase was offset by lower fuel costs passed through to customers and negative impacts from foreign exchange.

In the Dedicated Transportation Solutions business segment, Q4, 2015 operating revenue (revenue excluding fuel and subcontracted transportation), was US$187.6 million, up 11.0% compared with the year-earlier period. DTS operating revenue grew as a result of new business, as well as higher volumes and pricing. Total revenue in Q4, 2015 was US$232.4 million, up 5.0% from the year-earlier period, as increased operating revenue was partially offset by lower fuel costs passed through to customers. DTS earnings before tax of US$11.1 million increased 1.0% in Q4, 2015 compared with US$11.0 million in 2014. DTS fourth quarter 2015 earnings results reflect the impact of operating revenue growth and overhead cost improvements, offset by US$1.5 million of customer bankruptcy-related charges. DTS earnings before tax as a percentage of operating revenue were 5.9% in Q4, 2015, down 60 basis points from 6.5% in the year-earlier period.

In the Supply Chain Solutions business segment, Q4, 2015 operating revenue (revenue excluding fuel and subcontracted transportation) was US$322.1 million, up 4.0% (or 7.0% excluding foreign exchange) compared with the year-earlier period. SCS operating revenue grew as a result of new business, higher pricing, and increased volumes. Total revenue was down 1.0% to US$392.5 million, compared with US$396.2 million the same quarter a year ago, as increased operating revenue was more than offset by negative impacts from foreign exchange, lower purchased transportation costs and lower fuel costs passed through to customers. SCS earnings before tax of US$23.8 million increased 5.0% in Q4, 2015 compared with US$22.7 million in 2014. SCS fourth quarter 2015 earnings results reflect the impact of operating revenue growth, favourable margins, and overhead cost improvements, partially offset by a US$2.2 million insurance-related charge associated with a large medical claim. SCS earnings before tax as a percentage of operating revenue were 7.4% in the fourth quarter of 2015, up 10 basis points from 7.3% in the year-earlier period.

Looking ahead, in 2016, Ryder expects to deliver another year of solid revenue growth. We are forecasting stable to modestly higher earnings assuming a very weak used tractor sales market and a soft freight environment.

Ryder forecasts full-year 2016 comparable earnings from continuing operations of US$6.10 to US$6.30 per diluted share, compared with US$6.13 per diluted share in 2015. Operating revenue for the full-year 2016 is forecast to be up 5.0% to approximately US$5.8 billion. Total revenue for the full-year 2016 is forecast to be up 6.0% to approximately US$7.0 billion.