Ryder Posts Q2 Profit Surge, Revenue Up 10% on Leasing Gains

Ryder System Inc. reported increased profits and revenues for the second quarter of 2024, primarily due to better performance from its leasing and maintenance program, as well as the successful integration of its Cardinal Logistics acquisition. The company posted a profit of $127 million compared to an $18 million loss in the same quarter the previous year, largely influenced by a significant accounting charge from its U.K. operations in the prior period. Total revenue rose 10% to $3.182 billion but fell short of analyst expectations of $3.24 billion. CEO Robert Sanchez highlighted the company’s improved resilience and performance, particularly in its ChoiceLease program, which experienced a 6% increase in fleet count. Ryder’s Fleet Management Services (FMS), its largest segment, saw slight revenue growth to $1.478 billion. The company reported a notable increase in used vehicle sales, with an additional 9% in the second quarter compared to the previous year. However, the commercial rental unit's fleet size decreased by 12%, indicating some contraction in that area. CFO John Diez noted an increase in used vehicle inventory but expected it to decline in the latter half of the year as fewer rentals are taken out of service. Looking ahead, Sanchez expressed a positive long-term outlook for growth across all business segments, driven by trends favoring outsourcing. However, he acknowledged challenges in the short term due to weak freight conditions, which have led some clients to delay decisions or reduce their fleets. In the transportation field, Ryder's situation reflects the larger dynamics of the industry. The current freight downturn presents significant challenges, but also opportunities for companies like Ryder that are strategically positioned. The growing interest in outsourcing logistics and fleet management highlights a shift in business priorities, particularly as external pressures like economic uncertainty influence customer behavior. Ryder's ability to adapt to these changes while maintaining a focus on long-term growth will be critical in navigating future uncertainties in the market.