Ryder System has reported higher revenue and profits for the second quarter and first half of this year. The rises were aided in part by growth and new business in the company’s Supply Chain Solutions (SCS) division, which includes contract logistics for the automotive industry.
Across all its divisions, the total revenue for the three-month period ending on June 30th was $1.60 billion, an increase of 3% from the same period last year, while net earnings were up 33% to $62.2m., the logistics company reported an overall total revenue improvement for the last six months of 2% to $3.17 billion compared to this time last year. Net earnings in the first half were up 20% to $102.1m.
Total revenue in the SCS sector during the quarter was $597.2m, up 5% from last year, while profit before income tax was up 8% to $32.7m. In the first six months of the year revenue for SCS was up 3% to $1.17 billion, with profits up 8% to $56.5m.. The company said that higher operating revenue in the SCS segment was offset by lower subcontracted transport. It estimated that this revenue grew because of new business sales primarily in dedicated services.
Ryder has significant contract logistics and dedicated services in the automotive industry, including with General Motors and Delphi.
Ryder’s Fleet Management Solutions (FMS), which manages commercial truck fleet operations, saw total revenue rise 2% to $1.12 billion this quarter, and also up 2% in the first six months to $2.22 billion. The segment has also seen strong profit growth, with earnings before income taxes up 17% in the first six months to $127.3m.
“The improvement was driven by higher performance in our lease, commercial rental and supply chain offerings,” said Ryder chairperson and CEO Robert Sanchez. “Strong performance in our full service lease product line continued to reflect the vehicle replacement cycle that is currently underway with customers, as well as the benefit of improved residual values.”
Sanchez also cited the demand for commercial rental products in the US as a key explanation for the company’s overall financial improvement. This was balanced, however, by lower rental demand in the UK. In terms of SCS, the CEO noted the growth which began in 2012 and has continued, and is supported by favourable outsourcing trends.