Ryder Q1 Earnings Surpass Estimates, Improve Year Over Year

Ryder System, Inc. (R) reported first-quarter 2025 earnings per share (EPS) of $2.46, which surpassed the Zacks Consensus Estimate of $2.40 and improved 15% year over year, reflecting higher contractual earnings in all segments, partially offset by weaker market conditions in rental and used vehicle sales. The reported figure lies within the guided range of $2.30-$2.55.

Total revenues of $3.13 billion lagged the Zacks Consensus Estimate of $3.17 billion. The top line improved 1% year over year. Operating revenue (adjusted) of $2.55 billion grew 2% year over year, owing to benefits from the prior-year acquisition and contractual revenue growth in Supply Chain Solutions and Fleet Management Solutions, partially offset by lower commercial rental revenue.

Ryder System, Inc. Price, Consensus and EPS Surprise

Ryder System, Inc. price-consensus-eps-surprise-chart | Ryder System, Inc. Quote

Ryder's chairman and chief executive officer, Robert Sanchez, stated, "I'm proud of the Ryder team for delivering double-digit earnings growth in the first quarter. This marks the second consecutive quarter with year-over-year earnings growth driven by the strength of our contractual businesses. We remain on track to achieve expected benefits in 2025 from strategic initiatives that are well underway. These benefits include our lease pricing initiative, savings from our multi-year maintenance initiative, realization of acquisition synergies, and optimization of our omnichannel retail network. Our ability to generate ROE of 17% in the current environment continues to demonstrate consistent execution and the resilience of our transformed business model. “

Segmental Results

Fleet Management Solutions: Total revenues of $1.44 billion decreased 1% year over year, owing to lower fuel costs passed through to customers. Operating revenues totaled $1.26 billion, up 1% year over year, owing to higher ChoiceLease revenue, partially offset by lower rental demand.

Supply-Chain Solutions: Total revenues of $1.33 billion inched up 2% year over year, reflecting increased operating revenue. Operating revenues rose 3% year over year to $1.00 billion, owing to new business and higher customer volumes.

Dedicated Transportation Solutions: Total revenues of $602 million and operating revenues of $460 million increased 7% and 8%, year over year, respectively, owing to the prior-year acquisition completed in February 2024.

Liquidity

Ryder exited the first quarter with cash and cash equivalents of $151 million compared with $154 million at the end of the prior quarter. R’s total debt (including the current portion) was $7.76 billion at the first-quarter end compared with $7.77 billion at the end of the prior quarter.

R’s Outlook

For second-quarter 2025, Ryder expects adjusted EPS in the range of $3.00-$3.25. The Zacks Consensus Estimate of $3.23 lies within the guidance.

Ryder’s chief financial officer Cristina Gallo-Aquino, stated, "Our revised 2025 forecast assumes a more muted economic environment primarily impacting demand for our transactional rental business. We have also increased our free cash flow forecast to reflect lower capital spending. We expect the execution of our initiatives and the strength of our contractual businesses to continue to drive earnings growth this year."

For 2025, Ryder now expects adjusted EPS in the range of $12.85-$13.60 (prior view: $13.00- $14.00). The Zacks Consensus Estimate of $13.39 lies within the updated guidance.

Management anticipates total revenues to increase by almost 1% (prior view: 2%). Operating revenues (adjusted) are forecasted to increase 1% (prior view: up 2%). Adjusted ROE (return on equity) is now suggested in the 16.5%-17.5% band (prior view: 17%-18% band). Net cash from operating activities is projected to be $2.5 billion. Adjusted free cash flow is expected to be in the range of$375-$475 million (prior view: $300 - $400 million).Capital expenditure is estimated to be $2.6 billion (prior view: $2.7 billion).

We note that another player from the Zacks Transportation - Equipment and Leasing industry, Air Lease AL, will report its first-quarter earnings numbers early next month. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Air Lease is scheduled to report first-quarter 2025 earnings on May 5. The company’s performance in the first quarter is expected to have suffered from demand weakness, geopolitical uncertainty, tariff-related uncertainties and high inflationary pressure.

AL’s earnings have outpaced the Zacks Consensus Estimate in two of the last four quarters (missing the mark on the other two occasions). The average miss is 3.3%.

Ryder’s Zacks Rank

Currently, Ryder carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Q1 Performances of Some Other Transportation Companies

United Airlines

United Airlines’ UAL first-quarter 2025 earnings per share (excluding 25 cents from non-recurring items) of 91 cents surpassed the Zacks Consensus Estimate of 75 cents. In the year-ago quarter, the Chicago-based airline reported a loss of 15 cents per share. 

Operating revenues of $13.21 billion fell marginally short of the Zacks Consensus Estimate of $13.22 billion. The top line increased 5.4% year over year despite the tariff-induced slowdown in domestic air travel demand. Passenger revenues (which accounted for 89.7% of the top line) rose 4.8% to $11.9 billion. UAL flights transported 40,806 passengers in the first quarter, up 3.8% year over year.

Delta Air Lines

Delta Air LinesDAL reported first-quarter 2025 earnings (excluding 9 cents from non-recurring items) of 46 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents. Earnings increased 2.2% on a year-over-year basis due to low fuel costs.

Revenues in the March-end quarter were $14.04 billion, surpassing the Zacks Consensus Estimate of $13.81 billion and increasing 2.1% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) rose 3.3% year over year to $13 billion.

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