Ryder Profit Falls 64 Percent

The global recession took a 25 percent bite out of revenue for Ryder System, and growing expenses pulled profit down a whopping 64 percent in the second quarter.

Total revenue of $1.2 billion came down from $1.7 billion a year earlier partly because of lower volume and partly because of the lower price of fuel. Profit of $22.9 million was down $40 million from last year’s $62.9 million due to some of the same causes as well as foreign exchange and a restructuring charge of $1.3 million. The biggest differences were higher depreciation expense of $224.6 million compared with $209.3 million a year ago and lower gains on vehicle sales of $3.1 million in the second quarter 2009 compared with $10.2 million in the year earlier period.

The global recession hurt the fleet management segment of Ryder’s business most, cutting revenue 26 percent to $890.5 million. Fuel services revenue in the second quarter of 2009 decreased 58 percent compared with the same period in 2008 due to lower fuel prices and reduced gallons pumped at Ryder's fuel service centers. Operating revenue (revenue excluding fuel) in the second quarter of 2009 was $711.8 million, down 8 percent compared with $773.9 million in the year-earlier period.

In the supply chain management segment, second quarter 2009 total revenue was $308 million, down 30 percent from the comparable period in 2008. Second quarter 2009 operating revenue (revenue excluding subcontracted transportation) was $253.5 million, down 28 percent compared with the comparable period a year ago. Both total revenue and operating revenue declined primarily due to lower global automotive and other freight volumes, Ryder said.

"Overall trends related to the weak economy were consistent with the first quarter and continued to impact Ryder and its customers through the second quarter. While the downturn affected all business segments, FMS was especially impacted in the areas of commercial rental and used vehicle sales,” said Chairman and CEO Greg Swienton.

“In SCS, we were pleased that the unprecedented level of recent automotive bankruptcy filings resulted in no losses from accounts receivable, and that our team has managed effectively through the many challenges in this sector. Although it faced a range of difficulties, SCS returned to profitability during the quarter,” said Swienton.

Contact Thomas L. Gallagher at tgallagher@joc.com.