Ryder(US:R)2024-10-24 19:22Financial Data and Key Metrics Changes - Operating revenue for Q3 2024 was $2.6 billion, up 9% from the prior year, driven by recent acquisitions [10] - Comparable earnings per share (EPS) from continuing operations were $3.44, down from $3.58 in the prior year, reflecting weaker market conditions in used vehicle sales and rental [11] - Year-to-date free cash flow increased to $218 million from $32 million in the prior year, primarily due to lower capital expenditures [11] Business Line Data and Key Metrics Changes - Fleet Management Solutions (FMS) operating revenue increased by 1%, with ChoiceLease revenue growing by 7% [12] - Supply Chain operating revenue increased by 10%, with earnings up 14% due to stronger omnichannel retail performance [15] - Dedicated operating revenue surged by 49%, reflecting the acquisition of Cardinal Logistics, with earnings increasing by 31% [16] Market Data and Key Metrics Changes - Used vehicle sales results showed a 22% decline in used tractor proceeds and a 19% decline in used truck proceeds compared to the prior year [14] - Rental utilization on the power fleet was 71%, down from 75% in the prior year, indicating ongoing weakness in the freight environment [12] - The used vehicle inventory mix has shifted towards trucks, which are experiencing more favorable pricing trends than tractors [15] Company Strategy and Development Direction - The company is focused on creating value through operational excellence and customer-centric innovation, aiming for profitable growth [7] - A new discretionary share repurchase program was authorized, with $382 million returned to shareholders year-to-date through share repurchases and dividends [7] - The company expects to generate approximately $10 billion from operating cash flow and used vehicle sales proceeds between 2024 and 2026, creating $3.5 billion of incremental debt capacity [19] Management's Comments on Operating Environment and Future Outlook - Management noted that the current freight recession and weak market conditions in used vehicle sales and rental are ongoing challenges [5] - The outlook for Q4 2024 anticipates year-over-year earnings growth for the first time since Q4 2022, driven by higher contractual earnings [22] - Management remains confident in long-term growth trends across all business segments despite current economic uncertainties [23] Other Important Information - The company expects 2024 comparable EPS to be in the range of $11.90 to $12.10, which is double the 2018 comparable EPS of $5.95 [9] - The forecast for free cash flow remains unchanged at positive $150 million to $250 million for 2024 [21] Q&A Session Summary Question: Can you discuss lease renewal experiences and the impact of private fleets? - Management indicated that while private fleets are not growing as much, long-term growth is expected as they continue to expand [32][33] Question: Are there signs of recovery in the rental market? - Management noted a seasonal pickup in Q3 but no significant recovery is expected in Q4, with a potential upturn anticipated in 2025 [35] Question: What is the competitive landscape like in the current environment? - Management highlighted that competition is more focused on redeployable assets rather than new capital, maintaining pricing discipline [52][53]