ARII American Railcar Industries, Inc. (delisted)

Ryder System Inc. (R), one of the world's largest providers of integrated logistics and transportation solutions, reported first quarter 2013 results. Quarterly adjusted earnings were 81 cents per share, which surpassed the Zacks Consensus Estimate of 78 cents and increased 17.4% from 69 cents in the year-ago quarter. The year over year growth remained driven by strong performance across all segments

Adjusted earnings excluded the negative impact of 2 cents related to non-operating pension costs.

The company registered revenues of $1,563 million in the first quarter, missing the Zacks Consensus Estimate of $1,571 million. Comparing year over year, the results improved 2% from $1,536.3 million.

Operating revenue (total revenue less Fleet Management Solutions fuel and all subcontracted transportation) increased 3% year over year to $1,267.5 million, driven by full service lease growth on an organic basis along with increased volumes and new business in the Supply Chain Solutions segment.

Segment Results

Fleet Management Solutions: Total revenue increased 3% year over year to $1,099.7 million in the first quarter. The growth was based on higher Contract-related maintenance and Other revenues that increased 15% and 5%, respectively. Operating revenue for the segment moved up 4% year over year to $824 million.

Supply Chain Solutions: The segment includes operational activities of the company’s Dedicated Contract Carriage business. Total revenue was $576.5 million, up 1% from the year-ago period. Operating revenue (excluding subcontracted transportation) grew 2% year over year to $494.8 million. The year-over-year growth was primarily based on higher volumes in automotive and dedicated services offset by declining volumes of high-tech products.

Liquidity and Capital Expenditure

Ryder System ended the reported quarter with cash and cash equivalents of $76.5 million compared with $66.4 at year-end 2012. Cash from operations was $249 million compared with $186 million in the year-ago quarter, while net capital expenditure amounted to $449 million compared with $787 in the year-ago quarter. The company had long-term debt of $3,585.9 million, representing debt-to-equity ratio of 258%.

Guidance

For 2013, Ryder maintained its earning estimate in the range of $4.70 to $4.85 per share, reflecting year-over-year growth of 7% to 10%. For the second quarter of 2013, the company estimates earnings of $1.20 to $1.24 per share.

Recommendation

Ryder System continues to benefit from fleet management services and used vehicle sales. In addition, strategic acquisitions and increased investments on vehicles provide long-term growth opportunities for the company.

Further, healthy shareholder returns such as dividends and share repurchases make the stock attractive to investors. However, financial headwinds, heavy capital expenditures, competition and ongoing economic uncertainties may limit near-term growth for the company.

Ryder System operates with the likes of American Railcar Industries, Inc. (ARII), FLY Leasing Limited (FLY) and The Greenbrier Companies, Inc. (GBX). It presently holds a Zacks Rank #3 (Hold).

 
AMER RAILCAR (ARII): Free Stock Analysis Report
 
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RYDER SYS (R): Free Stock Analysis Report
 
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