Ryder raises outlook as used truck prices signal a freight recovery
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Ryder System has raised its full-year earnings outlook after a third quarter in which used truck prices, rental demand, and lease earnings all moved in its favor, adding to signs that the US freight market recovery is gathering pace.
Comparable earnings per share reached $4.33 for the quarter ended Sept. 30, up 21% from a year earlier, helped by higher fleet earnings and share repurchases. Total revenue rose 8% to $3.4 billion, with growth in all 3 business segments. Ryder now expects full-year comparable earnings per share of $14.85 to $15.05 and return on equity of 18% to 19%.
The earnings figure is only part of the story.
Ryder sells thousands of used trucks and tractors each quarter as vehicles leave its lease and rental fleets, so its pricing gives an early read on demand for trucking equipment. The company is now putting more money behind that read. It has added $300 million to its 2026 rental fleet investment, bringing the total to $500 million, to prepare for higher rental demand it expects in 2027.
Used tractor prices show how quickly the freight market has turned
Ryder’s used tractor prices rose 19% year over year in the third quarter and 15% from the second quarter. Used truck prices rose 5% year over year and 6% sequentially.
That is a sharp reversal. A year earlier, Ryder’s used tractor prices were down 6% and its used truck prices down 15%.
Used vehicle prices tend to follow the freight cycle. When carriers have more loads and better rates, they compete for equipment and pay more for it. When freight is weak, fleets park or sell trucks and prices fall.
Ryder sold 5100 used vehicles in the quarter, up 4% from a year earlier, while its used vehicle inventory ended the period at 7300 units, down 14%.
Chief Executive Officer John Diez said the business benefited from strengthening freight market conditions. “Used vehicle sales results exceeded our expectations, driven by stronger-than-expected pricing and sales volumes,” he said.
Higher resale values also lift Ryder’s largest segment. Fleet Management Solutions, which covers leasing, rental, maintenance, and used vehicle sales, increased pre-tax earnings 21% to $177 million. Diez linked the segment’s improved margin partly to early benefits from the freight recovery.
Truck rental demand is running ahead of Ryder’s fleet
Customers rent trucks to cover short-term peaks in demand instead of committing to multiyear leases, so rental tends to respond quickly when freight conditions change.
Ryder’s rental power-fleet utilization reached 77% in the third quarter, compared with 70% a year earlier. It achieved that on an average rental fleet 12% smaller than a year ago, at about 29,400 vehicles. Average rental rates on power units rose 4%.
A smaller fleet working harder suggests Ryder trimmed rental capacity during the downturn and is now short of it.
The extra $300 million is the company’s response. Chief Financial Officer Cristina Gallo-Aquino said the investment will position Ryder for higher rental demand it expects in 2027. Full-year capital spending stays at $2.4 billion, because lower lease spending, linked to the timing of lease sales, offsets the higher rental investment.
That makes the rental decision a forward bet. Ryder is committing capital now to vehicles it expects customers to need next year.
Not every Ryder segment is sharing in the freight recovery
The recovery is uneven across the company. Dedicated Transportation Solutions, which supplies trucks and drivers to customers under contract, reported a 1% fall in operating revenue and a 5% drop in pre-tax earnings to $34 million, reflecting a lower fleet count.
Supply Chain Solutions grew operating revenue 9%, but its pre-tax earnings rose a more modest 7% to $91 million, held back by lower automotive results and new business that is still ramping up.
Ryder’s full-year operating revenue growth forecast also remains at 3%, driven mainly by supply chain work. The raised outlook rests more on used vehicle sales, rental, and the company’s own strategic initiatives than on broad revenue growth.
Reported earnings will also look very different from the comparable figures this year. Ryder’s GAAP earnings forecast of $9.75 to $9.95 per share includes about $4.30 per share in non-cash charges from transferring its UK and Canadian pension obligations to insurance companies.
The bigger question is whether the freight recovery is strong enough to justify the rental bet. Ryder’s own forward-looking statements flag the pace and strength of any recovery as an uncertainty.
If freight demand holds into 2027, fleets that held back on equipment may face higher rental rates and used truck prices. If it fades, Ryder will carry a larger rental fleet into a softer market. For now, the company is backing the first outcome with $300 million.
Source:
Ryder System (SEC filing)
