What Ryder System (R) Said on Its Q3 Earnings Call

Key Points

• Ryder delivered strong third-quarter growth: Comparable EPS rose 21% to $4.33, revenue increased 6% to $2.8 billion, and free cash flow nearly doubled to $992 million.
• Fleet Management improved significantly, supported by higher rental utilization, pricing gains and stronger used-vehicle markets. Tractor pricing rose 19% year over year, while inventory fell to 7,300 vehicles.
• Ryder raised its 2026 outlook, increasing comparable EPS guidance to $14.85–$15.05 and lifting expected freight-cycle benefits to approximately $40 million, while maintaining its $2.4 billion capital-expenditure forecast.

Ryder System NYSE: R reported third-quarter results that included a 21% increase in comparable earnings per share, citing strategic initiatives, contractual revenue growth and improving conditions in used vehicle sales and commercial rental.

Comparable EPS from continuing operations rose to $4.33, while total operating revenue increased 6% year over year to $2.8 billion, according to Chief Financial Officer Cristy Gallo-Aquino. Free cash flow rose to $992 million from $496 million in the prior-year period, reflecting lower capital expenditures year to date.

“The Ryder team delivered our eighth consecutive quarter of comparable earnings per share growth,” CEO John Diez said. He attributed the results to execution on the company’s strategy, as well as stronger used-vehicle and rental performance.

Fleet Management Results Improve

Fleet Management Solutions operating revenue increased 5%, while earnings before taxes rose 21% to $177 million. The segment benefited from strategic initiatives in ChoiceLease, improving used-vehicle sales and stronger rental performance.

Commercial rental utilization reached 77%, up 700 basis points from a year earlier, despite a 12% smaller average fleet. Rental pricing increased 4% year over year. Ryder said tractor demand was particularly strong, and it expects rental utilization to remain near third-quarter levels in the fourth quarter.

Fleet Management Solutions’ EBT margin reached 13.2% of operating revenue, which management said was in line with its long-term low-teens target. Tom Havens, president of Fleet Management Solutions, said the quarter marked the first time since the fourth quarter of 2022 that lease, SelectCare and rental each posted year-over-year revenue growth.

Used-vehicle pricing also improved. Tractor pricing rose 19% from a year earlier and 15% sequentially, while truck pricing increased 5% year over year and 6% sequentially. Ryder sold 5,100 used vehicles during the quarter, up 200 units from a year earlier, and reduced used-vehicle inventory to 7,300 units, near the low end of its target range.

The retail channel accounted for 61% of used-vehicle sales volume, compared with 54% a year earlier. Havens said the shift toward retail sales contributed to tractor pricing performance; excluding the retail-wholesale mix change, tractor pricing would likely have risen in the high- to low-double-digit percentage range.

Supply Chain Growth Offsets Dedicated Revenue Pressure

Supply Chain Solutions operating revenue increased 9%, driven by new business, higher volumes and pricing. The gains were partially offset by lost automotive business. Segment EBT increased 7% from the prior year, aided by higher e-commerce fulfillment and Ryder Last Mile volumes, though productivity from new business ramp-ups and lower automotive results limited gains.

The Supply Chain Solutions EBT margin was 8.1%, at the company’s long-term high-single-digit target. Steve Sensing, president of Supply Chain Solutions and Dedicated Transportation Solutions, said Ryder’s supply-chain pipeline showed growth opportunities in consumer packaged goods, industrial, healthcare and retail.

Dedicated Transportation Solutions revenue declined 1%, primarily because of a lower year-over-year fleet count, though pricing partially offset the decline. Sequentially, the power fleet increased by 100 units as net sales activity improved. Segment EBT declined from the prior year, reflecting lower revenue and a prior-year workers’ compensation insurance benefit.

Diez said Ryder’s dedicated business is primarily specialized, with 70% to 80% involving specialized operations or private-fleet conversions. The company said it has contractual wage-inflation provisions and driver-wage indices designed to help recover rising labor costs. Sensing said Ryder is seeing mid-single-digit driver wage increases in certain regions, rather than broad nationwide pressure.

Capital Spending and Deployment Plans

Ryder maintained its full-year capital expenditure forecast of $2.4 billion. The company reduced its forecast for lease capital expenditures to $1.7 billion, reflecting the timing of lease sales, while increasing its rental capital expenditure forecast to $500 million, up $300 million from its previous estimate.

The rental investment is intended to position Ryder for expected demand growth in 2027. Ryder expects its ending rental fleet to increase 8% sequentially in the fourth quarter and approximately 10% during the second half of 2026. Management said the rental fleet remains below peak levels even after the planned investment.

The company expects approximately $500 million of used-vehicle sale proceeds in 2026 and net capital expenditures of about $1.9 billion. Ryder ended the quarter with leverage of 2.42 times, slightly below its stated target range of 2.5 to 3 times.

Gallo-Aquino said Ryder expects to generate about $10.5 billion from operating cash flow and used-vehicle sale proceeds over three years, creating an estimated $3.5 billion of additional debt capacity. After estimated replacement capital spending and dividends, the company expects roughly $4.5 billion of flexible deployment capacity for growth capital expenditures, share repurchases, acquisitions and investments.

Outlook Raised on Used Vehicle and Rental Strength

Ryder raised its full-year 2026 comparable EPS outlook to a range of $14.85 to $15.05, from its prior range of $14.40 to $14.80. The company cited stronger-than-expected third-quarter performance and expected fourth-quarter benefits from used-vehicle sales and rental conditions.

• Full-year return on equity outlook increased to 18% to 19%.
• Free cash flow guidance remained $700 million to $800 million.
• Fourth-quarter comparable EPS is expected to range from $4.25 to $4.45, compared with $3.59 in the prior-year quarter.

Management expects more than $70 million in benefits during 2026 from a multiyear strategic-initiative program launched in 2024. Ryder said it had generated approximately $100 million in benefits during 2024 and 2025 and expects total benefits exceeding $170 million by the end of 2026.

The company also increased its forecast for freight-cycle upturn benefits in 2026 to about $40 million, from $20 million previously. Diez said the additional benefit is being driven primarily by stronger used-vehicle sales, with a smaller contribution from rental improvement. Ryder estimates that benefits from a broader cycle recovery could eventually exceed $250 million, largely from rental and used-vehicle sales, as freight conditions develop.

About Ryder System (NYSE:R)

Ryder System, Inc is a transportation and logistics company that provides fleet management, supply chain and dedicated transportation services. Founded in 1933 by James Ryder and headquartered in Miami, Florida, the company serves businesses that rely on commercial vehicles, transportation networks and logistics infrastructure.

Through its Fleet Management Solutions business, Ryder offers full-service leasing, commercial vehicle rental, maintenance, fleet support and related services for trucks, tractors, trailers and other vehicles.

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