Ryder posts lower 2Q earnings, higher revenue

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Ryder System today, July 25, reported net earnings for the second quarter of 2007 were $65.1 million, compared with $70.3 million in the year-earlier period. Net earnings in the year-earlier period included an income tax benefit of $6.8 million related to changes in Texas and Canadian income tax laws. Excluding the tax benefit in the prior year, second quarter 2007 net earnings were up 3 percent.

Revenue for the second quarter of 2007 was $1.66 billion, up 4 percent from $1.60 billion in the same period last year driven by contractual revenue growth in the Supply Chain Solutions (SCS) and Fleet Management Solutions (FMS) business segments. Operating revenue (revenue excluding fuel and subcontracted transportation) was $1.16 billion, up 4 percent compared with $1.11 billion in the year-earlier period.

Fleet Management Solutions business segment revenue declined 1 percent due to substantially lower commercial rental and fuel services revenue, which offset contractual revenue growth of 7 percent. SCS business segment revenue grew 16 percent in the second quarter, driven by new and expanded business. Dedicated Contract Carriage (DCC) business segment revenue decreased 2 percent compared with the same period in the prior year, driven by lower volumes of managed subcontracted transportation and fuel cost pass-throughs.

“Our team was able to deliver a solid quarter despite headwinds from a commercial rental market that is considerably weaker than expected,” said Greg Swienton, chairman and chief executive officer of Miami-based Ryder. “Results continued to be driven by the growth of our core contractual businesses. In view of market conditions, we’re particularly pleased with the growth of our contractual Fleet Management Solutions business segment, which included a 6 percent increase in full-service lease revenue and growth of 18 percent in contract maintenance revenue. In our Supply Chain Solutions business, which is also contract-based, international operations showed significant growth in the quarter.”

Revenue for the six months ended June 30 was $3.25 billion, up 5 percent from $3.09 billion in the same period of 2006. Operating revenue (revenue excluding fuel and subcontracted transportation) for the first half of 2007 was $2.28 billion, up 5 percent from $2.17 billion in the first half of 2006. Ryder’s net earnings in the first half of 2007 were $116.4 million, compared with $117.9 million in the year-earlier period. Excluding the previously discussed income tax benefit in 2006, year-to-date 2007 net earnings were up 5 percent compared with the year-earlier period.