Ryder System Mixed Signals: Q1 Revenue Soft, Profit Strong, Cuts FY25 Outlook

Ryder System Inc R stock gained Wednesday after it reported first-quarter results.

Revenue grew by 1% year over year (Y/Y) to $3.13 billion, missing the consensus of $3.15 billion.

Operating revenue grew 2% Y/Y to $2.6 billion aided by prior year acquisition and contractual revenue growth in Supply Chain Solutions (SCS) and Fleet Management Solutions (FMS).

Revenue from FMS dipped 1% Y/Y to $1.45 billion due to decline in fuel costs passed through to customers.

SCS rose 2% Y/Y to $1.33 billion as growth in operating revenue was led by new business and higher customer volumes.

Dedicated Transportation Solutions upped 7% Y/Y to $602 million, reflecting the prior year’s acquisition completed in February 2024.

Adjusted EPS of $2.46 beat the analyst consensus estimate of $2.41.

Operating cash flow from continuing operations for the quarter was $651 million, with a free cash flow (non-GAAP) of $259 million. Ryder System held $151 million in cash and equivalents as of March 31.

Ryder System CEO Robert Sanchez said, “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.”

Outlook: Ryder now expects 2025 operating revenue growth and total revenue growth guidance of ~1% each.

The company lowered the fiscal 2025 adjusted EPS outlook to $12.85-$13.60 from $13.00-$14.00 (versus the consensus of $13.17). It expects operating cash flow of $2.5 billion and free cash flow (non-GAAP) of positive $375 million – $475 million.

For the second quarter, Ryder expects adjusted EPS of $3.00-$3.25, compared to the consensus of $3.31.

CFO Cristina Gallo-Aquino says Ryder’s revised 2025 forecast assumes “a more muted economic environment” that will impact demand for its rental business.

“We have also increased our free cash flow forecast to reflect lower capital spending,” Gallo-Aquino adds. We expect the execution of our initiatives and the strength of our contractual businesses to continue to drive earnings growth this year.”

Investors can gain exposure to the stock via First Trust Nasdaq Transportation ETF FTXR and SPDR S&P Transportation ETF XTN.

Price Action: Ryder stock is trading higher by 0.75% at $139.01 premarket at the last check Wednesday.

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