Ryder System, Inc. (NYSE: R) experienced a notable increase in its stock value on Wednesday, driven by the release of its strong financial outcomes for the fourth quarter of fiscal year 2025. The company announced an adjusted earnings per share (EPS) of $3.59, surpassing market expectations of $3.57 and representing a 4% year-over-year growth. Despite a slight miss on revenue, which came in at $3.175 billion against an anticipated $3.209 billion, the figure remained consistent with the previous year's performance.
Digging deeper into the company's operational divisions, the Fleet Management Solutions (FMS) segment saw a 1% year-over-year revenue decrease to $1.47 billion, with operating revenue at $1.30 billion, primarily due to softer rental demand. Its earnings before tax (EBT) consequently dropped by 10% to $136 million, impacted by challenging freight market conditions. Conversely, the Supply Chain Solutions (SCS) segment reported a 3% increase in total revenue to $1.38 billion and a similar rise in operating revenue to $1.03 billion, propelled by new business acquisitions and growth in omnichannel retail. However, SCS's EBT saw an 8% decline to $83 million, attributed to lost business and prolonged customer production halts in the automotive sector. The Dedicated Transportation Solutions (DTS) segment recorded an 8% decline in total revenue to $565 million and a 4% drop in operating revenue to $452 million, as its fleet size contracted amid a weak freight market. Despite this, DTS's EBT impressively rose by 19% to $40 million, benefiting from acquisition synergies and reduced bad debt.
Looking ahead, Ryder has provided its financial guidance for the first quarter and the full fiscal year 2026. The company projects an adjusted EPS of $2.10 to $2.35 for the first quarter, falling short of the analyst estimate of $2.69. For the entire fiscal year 2026, Ryder anticipates an adjusted EPS between $13.45 and $14.45, which is also below the analyst forecast of $14.63, with an expected revenue growth of 1% and operating revenue growth of 3%. Robert Sanchez, Chairman and CEO, highlighted that the fourth-quarter results marked the fifth consecutive quarter of EPS growth, meeting internal expectations. He noted the consistent high single-digit pre-tax earnings generated by SCS and DTS relative to operating revenue, and the solid earnings quality from FMS, driven by lease pricing and maintenance cost-saving initiatives, despite market challenges. Chief Financial Officer Cristina Gallo-Aquino further explained that the upper end of the EPS forecast assumes no significant improvement in freight market conditions, and that the first quarter is historically the lowest-earning period, facing the most challenging year-over-year comparisons due to used vehicle sales and rental market dynamics. Ryder System's shares closed at $217.31, representing a 2.41% gain during Wednesday's trading, nearing its 52-week high of $218.36, reflecting investor confidence in its long-term strategic direction and resilience.
The continued growth and strategic adjustments by Ryder System demonstrate that even in fluctuating market conditions, a focus on efficiency and adapting to segment-specific challenges can lead to positive financial outcomes. This highlights the importance of innovative leadership and proactive management in navigating economic shifts, inspiring confidence in sustained progress and value creation for stakeholders.