Ryder System (R) reported earnings on Tue 29 Oct 19 (b/o)

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Ryder System reports EPS in-line, revs in-line; guides FY19 EPS below consensus 

Reports Q3 (Sep) earnings of $1.49 per share, excluding non-recurring items, in-line with the S&P Capital IQ Consensus of $1.49; revenues rose 3.0% year/year to $2.22 bln vs the $2.22 bln S&P Capital IQ Consensus. 

Loss Primarily Results from an Increase in Non-Cash Depreciation Expense of $3.01, Due to a Change in Vehicle Residual Value Estimates of All Power Vehicles Used Vehicle Market Conditions Softened in Late Q2 and Intensified Through Q3, Triggering Review and Change in Residual Value Estimates to Reflect Current Downturn and Lowered Outlook Most Significant Negative Impact Expected This Quarter; Impact Anticipated to Decline Each Quarter Thereafter.

Sees Q4 EPS ($0.03)-0.07 vs. $1.60 consensus

Co issues downside guidance for FY19, sees EPS of $1.00-1.10, excluding non-recurring items, from $5.50-5.80 vs. $5.59 S&P Capital IQ Consensus. 

"As we discussed last quarter, despite market prices for used tractors showing stabilization and improvement in 2018 and early 2019, we began to see a softening in the used tractor market in June. In the third quarter, market conditions continued to worsen for tractors, and we now expect further market declines in the near term. As a result, we lowered our near- and long-term residual value estimates for tractors to better align with recent and expected market conditions. We also adjusted our truck residual estimates for modestly softer conditions. "Overall third quarter revenue and operating results were largely in line with our expectations, except for used vehicle sales results and the impact of related residual value estimate changes. Comparable EBITDA grew by 12% in the quarter, reflecting earnings from contractual growth and cost-savings initiatives.