Ryder System Inc (NYSE:R) presented its fourth quarter 2025 earnings on February 11, 2026, reporting a comparable earnings per share (EPS) of $3.59, slightly above analyst expectations of $3.57. Despite the earnings beat, the company's revenue of $3.2 billion fell short of the $3.21 billion forecast, contributing to a 2.92% decline in pre-market trading to $206.
The logistics and transportation company highlighted its transformed business model's resilience in the face of ongoing freight market challenges, emphasizing how strategic initiatives have positioned Ryder to outperform previous business cycles.
Quarterly Performance Highlights
Ryder's fourth quarter 2025 comparable EPS of $3.59 represented a 4% increase from $3.45 in the same period of 2024, primarily driven by share repurchases. The company maintained a stable operating revenue of $2.6 billion year-over-year, while its trailing twelve-month return on equity (ROE) improved from 16% to 17%.
Free cash flow saw substantial improvement, reaching $946 million for the full year 2025 compared to $133 million in 2024. This increase was attributed to reduced capital expenditures, lower income tax payments, and decreased working capital needs.
Segment performance was mixed across Ryder's three business units:
- Fleet Management Solutions (FMS) experienced a 1% decrease in operating revenue to $1.3 billion and a 10% decline in earnings before tax to $136 million, reflecting weaker market conditions in rental and used vehicle sales.
- Supply Chain Solutions (SCS) delivered 3% growth in operating revenue to $1.0 billion, though earnings before tax decreased by 8% to $83 million, primarily due to lost business and extended customer production shutdowns in the automotive sector.
- Dedicated Transportation Solutions (DTS) saw a 4% decline in operating revenue to $452 million, but achieved a 19% increase in earnings before tax to $40 million, benefiting from lower bad debt and acquisition synergies.
Business Transformation Success
A central theme of Ryder's presentation was the success of its business transformation strategy, which has significantly improved the company's earnings profile and resilience. The company highlighted how its post-transformation performance in 2025 substantially outpaced its pre-transformation peak in 2018.
Notable improvements include:
- Comparable EPS more than doubled from $5.95 in 2018 to $12.92 in 2025
- ROE increased by 400 basis points from 13% to 17%
- Operating cash flow grew 51% from $1.7 billion to $2.6 billion
- Business mix shifted toward higher-margin segments, with FMS decreasing from 44% to 38% of revenue while SCS/DTS increased from 56% to 62%
The company's balanced growth strategy focuses on three key areas: a transformed foundation, executing on strategic priorities, and outperforming prior cycles.
2026 Outlook and Strategy
Looking ahead to 2026, Ryder forecasts continued growth despite anticipated challenges in the freight market. The company expects:
- Comparable EPS of $13.45 to $14.45, representing potential growth of up to 12%
- Operating revenue growth of 3%, up from 1% in 2025
- ROE of 17% to 18%
- Free cash flow of $700 million to $800 million
These projections are based on assumptions of modest U.S. economic growth, stable freight market conditions, a 4% decline in U.S. Class 8 production, and continued favorable secular trends toward outsourcing.
Capital Allocation and Shareholder Returns
Ryder emphasized its strong capital position and commitment to shareholder returns. Since 2021, the company has generated $3 billion in free cash flow, repurchased approximately 24% of outstanding shares, and increased its quarterly dividend by 57%.
For 2026, capital expenditures are expected to increase to $1.9 billion from $1.6 billion in 2025, primarily due to higher replacement activity:
The company projects significant capital deployment capacity over the next three years, with approximately $14 billion available from operations, used vehicle proceeds, and incremental debt capacity. After accounting for replacement capital expenditures and dividends, Ryder expects to have about $5 billion available for flexible deployment, representing over 60% of its market capitalization.
Strategic Initiatives
Ryder's transformation continues to be driven by several strategic initiatives that have already delivered $100 million in benefits through 2025, with expectations to exceed the initial target of $150 million. These initiatives include:
- ChoiceLease pricing improvements contributing over $125 million
- Maintenance cost savings of more than $100 million
- Accelerated growth in asset-light businesses
- Enhanced proprietary technology to improve customer experience
The company is well-positioned for earnings growth through both strategic initiatives and potential market improvements:
Market Reaction and Analyst Perspectives
Despite Ryder's positive outlook and earnings beat, the market reaction was cautious, with the stock declining 2.92% in pre-market trading. This response suggests investors may be concerned about the slight revenue miss and potential challenges in the freight market.
Analysts during the earnings call focused particularly on rental utilization rates and the outlook for used vehicle sales, which remain challenging areas for Ryder. While company executives acknowledged these difficulties, they expressed optimism for improvement in the latter half of 2026.
As Ryder continues to execute its transformation strategy, investors will be watching closely to see if the company can deliver on its 2026 guidance and maintain its improved earnings profile despite ongoing market challenges.