Ryder, reporting sluggish earnings growth, sees ‘trough’ in freight market

The word “trough” came up several times during Ryder System’s earnings call with analysts, as CEO Robert Sanchez and others suggested that the second quarter was the low point of a freight cycle that they see as primed for an upturn.

Sanchez said 2024 will “represent trough conditions in used sales and rental.” Sanchez later said on the Thursday call that return on equity at Ryder (NYSE: R) would “outperform prior cycles despite expected trough conditions and used vehicle sales.” Speaking of used vehicle sales, he said, “I would say maybe we’re seeing some signs of stabilization and maybe a real troughing.”

Short-term numbers showed some weakness at Ryder. Non-GAAP earnings before taxes were $188 million compared to $237 million a year ago. Total revenue was up 10% to $3.18 billion, but that  benefited from a 44% jump in revenue at Dedicated Transportation Solutions to $635 million. Dedicated Transportation Solutions includes Cardinal Logistics, acquired by Ryder earlier this year.

Slow growth at FMS

The flagship Fleet Management Solutions business saw a revenue increase of just 1%, to $1.48 billion, while the contract logistics segment, Supply Chain Solutions, rose 14%, to $1.34 billion. That segment also benefited from an acquisition, IFS Solutions, announced last October.