Ryder's Q4 Earnings: A Closer Look at Segment Performance and Growth Drivers

Ryder System, Inc. (NYSE: R) recently reported its fourth-quarter earnings, showcasing strong performance across all business segments. The company's balanced growth strategy has paid off, with double-digit earnings growth in each segment and an adjusted return on equity (ROE) of 16%. Let's dive into the key takeaways from the earnings report and explore the growth drivers behind Ryder's impressive performance.



Fleet Management Solutions (FMS): Strong ChoiceLease Performance

Ryder's FMS segment delivered solid pretax earnings as a percentage of operating revenue, with EBT increasing by 13% to $152 million. This growth was driven by higher ChoiceLease revenue, which more than offset headwinds in rental and used vehicle sales. The segment's total revenue remained consistent, while operating revenue increased by 3%.

Supply Chain Solutions (SCS): Record Earnings and Acquisitions

Ryder's SCS segment reported record fourth-quarter earnings, up 58% to $90 million. This growth was primarily due to stronger omnichannel retail performance from higher customer volumes and improved productivity. Total revenue and operating revenue increased by 3% and 4%, respectively, driven by acquisitions and partially offset by lower sales activity.



Dedicated Transportation Solutions (DTS): Acquisition Benefits and Strong Legacy Business

Ryder's DTS segment also delivered record fourth-quarter earnings, up 10% to $34 million. This growth was driven by acquisition benefits and strong performance in the legacy business. Total revenue and operating revenue increased by 39% and 46%, respectively, reflecting the segment's strong performance.



Looking Ahead: Ryder's Balanced Growth Strategy

Ryder's balanced growth strategy has demonstrated resilience and is expected to continue delivering higher highs and higher lows. The company forecasts an adjusted ROE of 17% to 18% and comparable EPS of $13.00 to $14.00 for the full year 2025. This is supported by the earnings power of Ryder's contractual businesses, which increases capital deployment capacity for profitable growth and strategic initiatives.

In conclusion, Ryder's Q4 earnings snapshot showcases the strength of its balanced growth strategy, with double-digit earnings growth in each segment and a resilient business model. The company's ability to generate strong performance across its FMS, SCS, and DTS segments, driven by acquisitions and strategic initiatives, positions Ryder well for continued success in the coming quarters. Investors should keep a close eye on Ryder as it continues to execute its balanced growth strategy and deliver higher highs and higher lows.