Ryder System (R) 25 Jul 242024 Q2 Earnings call transcript

Good morning, and welcome to the Ryder System Second Quarter 2024 Earnings Release Conference Call. [Operator Instructions]. Today's call is being recorded.

If you have any objections, please disconnect at this time. I would now like to introduce Ms. Calene Candela, Vice President, Investor Relations for Ryder. Mr. begin. may you Candela,

the political Commission, about non-GAAP morning, a market, Call. Ryder's to you subject and nearest in factors XXXX. results are may to regulatory Executive from expectations to I'd you'll Officer; Chief statements this earnings Good uncertainty John measure President Act differ Securities Litigation Private XXXX earnings available expectations call that Second of Financial Earnings information filings factors. More GAAP on each are presentation, Officer. within today's on changes current Vice in Exchange forward-looking on in these some Conference call of morning's and due Chief is like and Robert website. Presenting hear of and you. contained the Ryder's Securities detailed business, this statements welcome reconciliation the materially Quarter with during Sanchez, meaning and These measure Reform and and Thank to are the competitive, which Diez, in Executive based and changes are financial management's and to release, Chairman Actual economic, presentation circumstances. Ryder's these remind and

over ], Supply the presentation. At Management this Fleet and Additionally, President Robert. available following questions on and to Tom call for Solutions, Havens, of the time, Chain Dedicated are turn [ President Steve Transportation Solutions; and Sensing of Solutions call the today I'll

again our that quarter conditions morning, for Good despite for thanks results us. challenging. proud everyone, and this remain team extremely joining delivering solid I'm of freight

we providing enhance have return versus increased of to discuss strategic we've review our ChoiceLease. the which outlook cycle John that long-term the and earnings by the begin profitable continues better-than-expected the with benefit to quarter business derisk growth due Our you transformative you significantly well through to demonstrate forecast our drive in positioned operating our the cycles. I'll I'll are call model, take from business and that today's made returns prior will profile exceeded then and how second changes upturn. then updates. to key results results performance

on Let's X. begin Slide

Turning Slide to X.

and phases cycles. IFS execution current is outperformance The the our has strategy growth our freight drive all profile of prior Across prior relative is effectiveness on of track. Logistics and Cardinal impact cycle, model of strategy. or higher our business of of our to continuing been fulfillment demonstrating return cycles, transformed Our balanced services than recent acquisition integration the and to earnings

you a added growth Logistics As our acquisition of and of November enabling CPG primarily our we position to acquisition of co-packaging X year, supply completed co-manufacturing Transportation and IFS, customized solutions. chain which strengthening may on Cardinal recall, we On capabilities supporting February of business. last further the X, as the leading completed provider Dedicated

in growth continue large We decisions, the business X outsourcing all favor secular segments, value see long-term addressable and our to solutions. supported that of by opportunities trends markets,

month, we full improving creating cycle. At period our returns. with initiatives Adjusted innovation, is given where of last returns freight in growth are our phase value our focused for generating XX-month introduced we expectations compelling cycle in which Investor balanced and enhancing operational customer-centric further investing the of on profitable strategy, next trailing in the line Our excellence, remain focused through XX% the is Day growth. on ROE

to cycle will upturn continuing for that ourselves result execute strategy enhanced. our full be in the We are cycle while will confident positioning returns that further

the in our FMS also to continue over optimize management We returns enhanced to expect cycle. asset playbook

and to have to mobile in returned we maintenance and profitable recently quarterly profile, shareholders Our retail deployment through support higher Year-to-date, we to of grow XX% quality by in reflecting our shareholders. $XXX announced planned growth dividends. cash share and capital capital return increased repurchases million acquisition dividend enhanced return a with which will to FMS. our our business contractual portfolio is the expanded us providing use capacity, We

strategy. full cycle. Slide to to XXXX our expected We're Our the for clearly $XXX year shows increasing $XXX performance we now It freight our reflecting million positive peak quarter per on how solid will $XXX forecast the and metrics was operating of the comparable conditions. you've spending. and to due cash you In majority that lower had the during million balanced to flow one $X.X and executing revenue billion of with generated lease believe if million likely Supply time, capital XX% free model is lows key balanced chain encouraged our our and second that growth to financial by our was approximately execution This enable prior revenue $X.X X-year $X.XX cash to by of in XXXX, flow XX%. cycle FMS. over strategy, that been from At rate highs a earnings our billion. strategy our share and higher implementation business deliver are have growth of ROE since us continue XXXX, familiar of improved operating growth higher transformation. of is of was the following X

used look expecting what we vehicle we're sales a at that from let's expect will trough Ryder XXXX, represent Now conditions and In today. year and rental.

asset-light innovative XXXX. mix strategic supply approximately XX% revenue Dedicated than ROE and expected meaningfully double XX%. with comparable to to $XX.XX to basis cycle prior our we these a to $X.XX. approximately be chain peak. is to to transformed XX.X%, up derisked earnings of generated more generate XX% XXX comparable towards during EPS and is XXX in is of peak. Through chain range is XXXX XXXX XXXX business revenue did to businesses expected increase also come technology, from to expected to XX% the rate points be EPS growth, the during and X-year XXXX organic our to XX% growth expect to expected returns $XX.XX, acquisitions We of higher shifted model than we've compared the Supply above

supply chain increase contractual billion of result to cash flow a As Dedicated operating businesses, $X.X expected in XXXX in billion from is $X.X profitable and growth XX% this our lease to year.

to cycles encouraged our XXXX positions to prior by and solid thus business us well quarter when that an execution initiatives the beyond. I'll for John now here, review momentum transformation of peak I'm confident prior even comparing to outperforming multiyear the second from over far results the our and and trough. shown is call expected turn As performance.

metric capital million The was sales revenue market year-over-year by earnings. Return decline X. from quarter, to and proceeds vehicle vehicles used prior market partially Year-to-date conditions. primarily increased Robert. Comparable sales Thanks, decline down on the to due XX% vehicle second reflects partially second from results higher lower contractual of Operating for capital the year, per primary offset share weaker were year Total and in the acquisitions. on reflects $X.X $XX the in sale quarter, by in primarily second working company billion from quarter year. and to reflects higher flow the properties. million the the from prior up used and in recent financial $XX related Page conditions earnings from used free rental rental weaker continuing in expenditures prior needs $X $X.XX The operations XX%. offset equity, earnings acquisitions of cash lower recent

market remainder compared were and elevated used growth XX%, X% our prior from for the by below lower to Solutions prior reflect revenue QX, remain quarter Fleet year. year XX% on lower from with Rental Page rental some results partially revenue not higher XX% levels earnings weak. management demand. was the Rental improvement seasonal X. continue in organic we rental increased fleet to the and fleet rental to what the year-over-year from ChoiceLease reflect coming increase as results revenue operating well about grew freight fleet offset from Management lease vehicles Dedicated and see demand. to due on conditions We lease choice Results as that management enough recovery. million power from pricing and vehicle intersegment but in operating utilization Turning to typically half revenue down a to in anticipated. down revenue, the and was in the segment. Pretax Cardinal $XXX demand as signal weaker QX lease saw

fleet in Our year. was prior pricing line with

cost recently higher and in increased low in Fleet the is in earnings Management used revenue impact benefits was long-term with EBT vehicle we low our conditions weaker to maintenance of quarter rental. and of line During XXXX, cycle, sales a double be expected as digits full for XX.X% in partially for sales the target ChoiceLease market initiatives vehicle offset where results our highlights given from and the below the results from quarter. but operating freight our used X quarter, teens. Page second savings the percent year expectations are

levels sequential elevated proceeds conditions market relatively year, proceeds and to proceeds Tractor sales used used year. anticipated, in with prior proceeds remained stable, XX% decreased vehicle basis, tractors from for prior continued to Compared and tractor XX%. truck declined decline. used the weaken whereas On for pricing X% a XX%. pricing trucks increased declined continue truck for As

above and sold quarter rental vehicle vehicles lease our range sequentially to used during just at units inventory is to down prior we serviced expirations. X,XXX quarter, the inventory fewer was out balance expected be targeted vehicles, the increased versus the to as During year. Used up decline of Inventory expected year. higher end, X,XXX are reflecting

provides for historical information. depreciation value purposes. declined proceeds sales and and proceeds value your pricing for current used appendix Slide estimates XX estimates vehicle Although used residual the for trucks remain tractors residual in used above

quarter target a Supply driven year $X Operating Chain reflecting for X.X% revenue Supply by and verticals. across Chain high Turning organic single line automotive acquisitions was recent is the the industry from XXXX. revenue on prior X. operating expected with of Page by segment's in as earnings to year, full all to and digits XX%, long-term primarily chain increased Supply performance. remain stronger percent EBT million of increased growth in

for target. improved number percent Cardinal XX. Dedicated from drivers the EBT time quarter to high reflecting in of operating to Logistics. increased driver operating continue as acquisition and revenue revenue conditions with acquisition, as single-digit the integration EBT a related improve. Dedicated Turning other to the in to prior increased of from positions by the and fill favorable on reflecting was EBT continued partially professional of benefit open costs. and XX%, Dedicated segment's year, offset Page X.X% performance our long-term Operating line

lower uncertainty, billion increase our and $XXX by prior also year-end lease now as activity. of reflecting lower capital Year-to-date, reflecting loans. activity, was well due decisions year investments. below spending spending expected lease of capital to sales expected lower spending We forecast spending $XXX increased approximately Slide million fleet Turning prior lease to lease Year-to-date, redeployment full as rental delayed below $XXX reflecting $X.X capital XX. from sales planned million our rental is million activity. XXXX year, to year, reduced lease XXXX and be approximately economic second to moderately quarter is was

and approximately Our is forecast year-end from rental XXXX fleet and be unchanged by rental, trucks year-over-year. In represented trucks versus XX% XXXX, year-end relatively tractors capital from prior approximately on XXXX. capital expected up rental we to to XX% is spending our continue down trucks stable spending pricing X% increase in fleet, for trends. from At forecast have our our as benefited demand of rental

capital for year is now XXXX trucks prior year. below expenditures Our and be expected $X.X ] approximately [ to billion full

in in expected We full be used to of year expenditures capital billion. expect $XXX proceeds with million $X.X from XXXX sale approximately approximately the net vehicles

Slide XX. to Turning

a cash $X.X flow cash free year to $XXX full forecast million $XXX of for has XXXX range at our million. is flow unchanged Our billion, forecast to for operating increased and positive

cash driven operating of revenue. growth supply by XX% shown, chain dedicated which in our As and contractual flow lease, over comprise strong, Ryder's remained operating businesses,

of the given growth to increased OEM cash generated resulted million free XXXX, lower in cash late flow prior strategy investing is in forecast the also our do has of flow capital fleet as U.K. conditions, and of expect free lease we midpoint the the exit flow free free the summary of FMS the higher free slide benefited free for the the as $XXX flow growth. Proceeds growth. cash business range positive targeted by flow. delays balanced side profile prior cash to growth right in XXXX. significantly effects In market XXXX. The not implementation and well from in changed forecast our cash cash on Our since of spending same business as COVID Lower flow our growth at since fleet the illustrates our

focused are profitable capital drive Our strategy allocation return our growth remain and unchanged to and priorities capital on our to shareholders. supporting long-term

capital range target was continue to the Our quarter organic and top and growth organic invest growth. Balance back below shareholders priority fund outlook. as that, continues call at XXX% end of to well our to share discuss over turn of the is XXXX to ample return to sheet to through capacity the as and in XXX% our provide dividends. With leverage Robert I'll XXX% strategic repurchases to to to investments.

of continues XX, our the in of end bottom ongoing to cycle our prior the freight although timing The for to in weak to updating on $XX.XX conditions range high used to we EPS inflection XXXX the weak uncertain. $XX.XX remain outlook $XX.XX. forecast that Turning We're gradual sales, rental and and our year, to these of assume of reflects our end full conditions vehicle a continue Page businesses. range year forecast see later the recovery and from a comparable to $XX.XX remains forecast

consistent chain customers freight downsize at supply economic some and downturn sales confident are Our are delay the XX% decisions growth and These have long-term contractual XXXX causing with economic for ROE the forecast remain prospects extended fleets. XX.X%. current The trends our dedicated been in and to least the where or businesses. environment. their we uncertainty We secular near-term is in to headwinds cycle all

continue transformative $X.XX the the a We're well forecast business that that from the made the of quarter cycles prior and outperformance providing will year relative believe versus that all upturn. to cycle we've drive changes are benefit EPS third to to prior to continue segments We to comparable of $X.XX $X.XX. also positioned to

XX. Slide to Turning

benefit we cycle the is on that addition the to upturn. In positioned are well managing focused to down business from through the also cycle, ensuring

optimization initiatives, As network. Cardinal at as an the the maintenance to next recent contractual in we peak. such expect approximately benefit $XXX pricing, of we annual earnings million million earnings multi-client pretax from of lease by Day, and is in savings cycle our outlined Investor synergies strategic of expect we the pretax the our cost This and initiatives growth addition realization $XXX

predictable Although the cycle have and revenue generate in management flows as new relatively Most million are cyclical the of segment turnover that benefit opportunity stable fleet resides headwinds revenue rental these operating for the the lion's $XXX of benefiting earnings long-term sales over our count majority we within each business expect contracts from result, Dedicated, the cyclical and cycle, and share and of is our the has benefit supported by the to X still cash upturn. a driver recovery exposure used to availability costs lower improved vehicle businesses. In and from but been recruiting sales growth. of

we As the seek as been supply freight improve to our and to vertical sales volumes point. In omnichannel retail pain cycle have in and strengthens earnings. Dedicated fleets weaker growth and to revenue driver this availability becomes see in private revenue more chain, headwind address expect challenging, opportunities a incremental solutions

as and volumes footprint services supply recover expect is We results chain benefit for leveraged. to the these incremental

horizon activity is to additional technology vehicle term emissions for demand pre-buy down activity from the during positioned all An for and ahead this cycle FMS the cycle conditions and segments ChoiceLease pleased activity the benefit uncertainty XXXX pricing outperformance sales also contractual sales been old the and for appropriately to technology. the supply expect changes. chain. We've engine opportunity to upturn. We by X We freight support expect improved due EPA longer benefit anticipated lease, reduced business benefit will and economic the this of used dedicated would on have

and the downturns. In to during come. for diversification delivering of Since and outsized Turning generated XXXX cycle cycle ROE down expected generated adjusting cycles XXXX We Slide during has of strategy, transport the despite higher rent. to our resulting prior more shareholders the business mix achieved implementing the have outperform of phase XX. vehicle growth significantly each in continue strong used to to games during we sales demonstrated conditions and the even we with after relative cycle highs XXXX, value model. returns Ryder prior vehicle used up is balanced the higher returns the to to trough resiliency our expect

for and expertise capabilities will our products, and note our momentum file by our question today, customers to to limit one remarks. We We a our growth, continue that committed from in Please technology profitable remain secular lot significant value trends, cover to and had multiyear supported deliver opportunity operational investing see initiatives. expect today. so yourself shareholders. That please each. we We that our concludes prepared later of material to ongoing XX-Q to to

over can. If will it you operator. have to you're the At I'll get turn the questions, welcome additional in many as time, back we to that as take queue this

[Operator Instructions]. first Morgan will with And our come Stanley. from question McGarvey Christyne

seeing guidance sort digging the to to just seems and at right recovery But like on some bit. what sort high hear bit Would It little pushed are the particularly guys that love seem end. a bit of It more, points would cycle underpinning in to data out you love little little like what's a the track of does start the early of just that? a cycle of in life. of are kind we seeing

on just your that. So be I thoughts would curious

Thanks, range point forecast what there'll range. that thinking in end a in recovery rental pickup the Christyne, reiterate that be gradual the contemplates of and second we higher the lower second around and vehicles me The -- end the of of no half. continues force. range the let in And to just in we of the used half kind gave assume

just So weak conditions. ongoing kind of

really in some a mention terms vehicles. seen signs used in hand In not in an to would then it quarter FMS. business I'll seeing I'll troughing. we're second stabilization the they're maybe of and we real rental our I and what say have Tom maybe see in inflection of that seeing, certainly we're because we X over

We'll as we go into rental second First, seasonal uptick we the quarter. in see saw ] third. [ the that in a

a in per in the haven't which about our much how utilized. is while, we that second units saw unit, lease something of X a lease Another being typically up miles We an probably talked is And sequentially indication sold the go that are first tractor then pricing. I in X% unusual for around this we've reported that know new in some had quarter while. the time we also about up the it quarter. pricing, used tractor units mix

you it's those when kind of take flattish. So out,

which really is out side. So also bottoming a I pricing, used of that's a tractor of kind think

So give more it each over around to X. let little to color bit Tom hand you of those me a

Yes.

but there, quarters So more let straight just saw this sequential me rental with period start second before demand color here. quarter Six little a we declines of

normally seasonality the rental. went year, in last do year, you business in the demand declined see the year. So But we through as entire

So going this demand. quarter to we expect actually from We would to from was QX that a the -- QX typically sequential increase see just first see that saw seasonality. in

be it to year-over-year of think seen XX had trend good normal So a recovery unit. any a go seasonal it declines per even a a was that in miles just finally perspective, little story lease we in quarters in I straight may don't where dramatic, more way, but the sort up. bit signals see improvement demand. From of

So year-over-year X we the time miles the years, in unit last quarter. over saw per a little increase

mainly declines fleet, see the to customers did some we fleet. due in So lease downsizing their

said, about So out, year-over-year. And of finally, miles increase tractor pricing. maybe tractor did used in some kind the When fleets X% sales, normal that in you Robert we pricing some finally of drove been this vehicle in then newer improve for rebalancing trend when and you up. that We pricing an which those is unusual there's indication sequentially. underlying the would saw down us pricing have have an equipment, like take rightsizing that see sales of

you sequentially. So tractor flattening kind will, of if pricing, out of

sign quarter in bottoming So X may a a of of we maybe things indicate those out that and recovery. saw kind are the the slight that

Kauffman Vertical question [Operator Instructions]. Jeff from come the with next Research. And will

companies. traded behaviors but private changes taken this aggressively pressure being reaction where about bit. I'm now and this pretty the It's look with slow do act like for the orders seeing a little coming in higher just people that down kind like P&Ls seen capital feel customer aggressively and half their the of as we're just in equipment their spending, truckload to at people isn't curious, you're environment. the interesting, of I more have research the more this here, the OEMs view across to you're down I and talking just in are But forecast publicly delayed a when and positive see industry it's starting been down more you year. for because take second pretty of terms that under we've grips And

is Jeff. a we're in a delayed Yes. much as were Look, of of over for They new really coming hot for Thanks, I year. as think terms we're period orders seeing off trucks. what

in. bit a waiting So then of frenzy of come they've come for getting and to a of order lot [indiscernible] in [indiscernible] into a people them vehicles

this So about get I right there's now, days. how here know up think a XX won't most to a can for next in because I I tractor order to they companies are many it hurry XXX probably today year. reevaluating I having need not and pick the

slowed So that in would to down cycle. unusual, not That's of order a have the say, has are come it. lot the order we for times I in where kind and from get need line lead to in

this businesses. turn seeing our pretty aren't But I want on a So to can in sure yes, we sales pickup make contractual and huge quickly. stuff

interest a can great transpire, next downside until their the are our economy though, for then customers we're see a Dedicated until especially Rental, do will, customers or this I excuse to if and a have, the and using believe to I headwinds uncertainty with from reason in that going when a getting leading, is months on trucks even for this come need that at think if lease they again, maybe is especially now the which are going We more, around the or deep it sign. units are the do yet. What that trying election there's lease season. a the also been market in think we while, strong down, of not wait to what for more seeing and fleet X customers they here should least month, that up are I good we're why point to I freight that's really rental during is outline the a some decisions, equilibrium rates month picked has running say, I seeing since delayed where you

And a after -- You tractor we the bottom to we we you in historically. from pick peaks back need those over grasp for in decline the can the that got And pricing, of to pretty pricing it then pretty give the appears and trucks. rental where you a kind a are significant seeing on last more good see there 'XX, are 'XX of a crazing bottom quarters. get to what couple a be appendix

Supply don't capital the numbers this most were We're I we the spend. going calls What's And I that down. has to SelectCare we're terrific vehicle just curious because our kind going fewer Chain theme results quarter notice fewer and to in driving take take across from want We're of that? Okay. to been did trailers. saw the I'm Dedicated. reducing detract trucks.

that. got you John,

Yes.

to got that that has we a see, years. a to the over full have what X trend convert seen and leads, customers here service So been we've number to continue last we've elected over of select

see expect year, to year. once see up. So And as the to that next start continue SelectCare we should you numbers, the the balance over picking get I reduce you to of that would then

[indiscernible].

fleet their us. We we X to trailer actually I there low the really to also impact were very No, saw downsizing similar as where had lease were well. customers fleets would our large say fleet, SelectCare

the of P&L. large fleet, in low kind impact So but an to

If and the you the were actually the a fleet despite up look P&L, the revenues little returns at headwinds year-over-year bit were better.

be of returns. fleet but little smaller may a better of kind So rebalancing bit that a

Okay. last this. then question And follow-up on

seen that a sensing side any is thinking we've public of fleet in more change the for-hire trends terms the of fleet. than fleet X last the need private One fleet? on the you Are expand private the customer years lot to on activity over the

capacity of private -- driven I was we shortage think truckload probably XXXX -- spike. likely expansion that by the that driven had most during was the the fleet by

So scrambling lease we our vehicles. customers when all really it in our customers that's saw lease were for

that that at fleet. vehicles maybe we're now some those they to terms indication downsizing to miles in -- point think But a stabilization they're least could unit getting first still and a on. needed I increase I have guess, they're getting of closer. got vehicles There's they've be -- in now number going is, come getting right in the again, per that the of

And question Goldman Sachs. we'll with take Jordan Alliger a from

Question on ahead of Dedicated. I the I to bit were maybe where At have seem tracking thinking. longer-term little a what thinking, high of that was least you. range, thinking The what acquisition single-digit especially in with right margins and target, be what was sort or we

than curious So you of some talk specifically, think the then to quicker performance? of the maybe could you And if you stay could level to expected? sort behind do drivers maybe closer this of type

Jordan. Yes. Thanks,

saw this very that quarter the with in results Dedicated. we pleased are We

bit there. I getting actually that we the long-term you of difficult And was would which earnings that and really, business better. speaks tend to at this in -- from performing But some to look primarily is supply see environment, given driven our is of the by probably I of growth it the it lease a the power you're and even just contracts where a -- pickup get. an volatility growth of dedicated, in we chain a we the Some these seasonal industry have these businesses, think the that to base bit say, unique of earnings

basically earnings up which one was of [ goal company. our are volatility moving They're used are helping the the rental some of strategy. holding the ] really that businesses those of the and growth business, balanced that to counter So we in see

supply driven lease saw one, lease, seeing And growth. in we're in chain is then was Dedicated earnings the outperformance by you the quarter outperformance even in with So also good business. our

performance with too expect close we the little the to come we early year the in that the to aggregate pretty gave see coming about we pretty good. going how say again, we really to but Actually, in in a we're good that we probably And We're waterfall. feel had waterfall beginning So full pleased at what we're Dedicated, we there. feel add of businesses, contractual that year. to an pretty in the in

next And from Ossenbeck JPMorgan. Brian with come will question our

but So the are pulling and to see, of this there maybe little been wanted guess capacity of you interested stuff too like I particularly bit does push segments? a shorter-cycle seem just market, given extra last maybe And and for uncertainty back customers, pricing. on of has to there of that the lower competition I some some changes what there's bit pricing there's caused the across for trends also stability, in has of cutter in seeing longer signs terms environment the some out over on behavioral from a because it different some but Dedicated

some would comments competition price be on helpful. So and

on touch bit. contractual businesses I'll little a the

we from truck the buy a a don't side, we On it's in primarily what terms us until have signed leasing most of lease. see competition, of

push more clearly type generally, there's the into So that the of aggressive think more bit market. the to dedicated discipline this But just brings some Dedicated freight a not pricing. equipment capacity, is vanilla sometimes pretty of there. Around need equipment pricing some There I freight. rental maybe redeployment decent business, little

to seeing and take some look as truckload We spot rates lower pressure advantage rates. are customers of

less of However, Dedicated, do which customized we what primarily challenge. on the is type a

So our brought Dedicated it's it core think, you the that the standpoint, over vanilla competitor I relatively some to rational, market, In chain, requires maybe back. is freight, make customers I again, more decisions. saw getting competition, that's from strong. And during moving a think again, they've are handling. But I was really more is supply type that freight specialized business just say that would especially XXXX. of when still That customers why we're generally, getting taking in

I chain supply a traditional has the moved on think pricing the -- lot much sure business.

of of traditional even activity, the some the in on Now pricing warehouses, again, some pricing may supply contractual multi-client multi-client have e-commerce aggressive business, But chain-type areas. where some decent discipline. competition empty pretty might see some generally, you our

Okay.

things the of like rental much the understand end here top to mean pretty So that if understand of I can [indiscernible]. sort range wanted there, that expected insuring recovery is small, imply year better. I the especially with the embedded to that, can what that you a move a seems recovery that's wide, expecting, just guidance but of in small the to and range, the and maybe through the sort walk it how little -- But that that's bottom half you're just that's back the isn't quite of and in

normalized where Yes. expect then back I of end the mid- get a kind that I rate, to little up bit high call we for more of to gains we into would I would are -- is rental range, mean, high tell which we I what you utilization and XXs would from the would guess, today.

the bit we of $XX I think in that more We're just under going were million to and into million quarter. this little probably a above fourth second be quarter. going $XX the half

not And doing uptick So the then then UBS of for to really a from modest yes, modest it's really Maybe are the seasonal in where more the year, balance primarily end, a quarter. And in today. down much. half. the we fourth rental second pickup flattish of bottom on

yes, everything that. -- top the little -- a not difference more of could of So bit between and this, bottom. more obviously, in little between a not have And it's it's is the huge a they're you bit

So it's be what's next matter market here, couple it's the range the reasonable collaborates quarters. over very and we how it think much terms in of a achievable a of will a of

a take question Group Scott we'll with Wolfe And Research. from

last just want follow point. on I So to up that

amount of seasonal. the right, So QX little just bit from earnings, good a than look guide, in better when a quarter normal I up terms third at it's probably

like that's So rental the third much of in sound used better it reflective getting quarter. and doesn't

just in better? am is more some more is there core just Or has -- I the mishearing used earnings is is getting and rental like right? So assumption better? and the specifically it that getting guide it And QX that

you uptick. of It's better what QX, it's the earnings would uptick said. QX be I No, and then transactional not the seasonal to sorry, would -- quarter, I'm seasonal from fourth getting more uptick, core say

going inflection over business continuing modest inflection -- contractual of it's to more But to QX be deliver. in the an -- to QX. to you QX, QX go primarily So

used the And anything makes that above to we get target. tractor is That is? where at the then think showed do is inventory then realistic need now value price Like And where used -- assumptions? I I with to with residual Okay. And the it inventories the residual think is sense. it do range? given just long-term going you better

on let John Yes. I'll little give color a that. you

Yes, Scott.

just with sitting above levels X,XXX to sitting inventory X,XXX we're So our range target of X,XXX. at

We inventory that have reduced the drove rental up fleet, which level.

rental of balance not our expecting year, significant we're of fleet. any the the For reductions further

start continue will our but the coming dramatic Nothing should certainly levels So inventory through end to there, down up. of peaking actually you year. the not expect

indicator. that's So X

tractor stability The to. transaction single-digit in alluded X Tom seen other for the would even relative I though last the quarters. QX that with adjusted indicator one for declines, say, is we've classes

some last then So QX. expecting enjoyed and may we sort inflection we're the we're getting on we've recovery we the are capacity the imbalance several of based that of an demand hit point to that, think seeing in bottom we there. And over stability quarters,

us should year So going market into vehicle for that -- our slide. provide all sitting see you as typical did conditions are XXXX, get is the we used all for and we indicators better. And we exit we

above We there's value there handle even can modest tractor sort any room we of are the sitting side, our reduction. estimates. on that residual And

in way Does your at since ask ago, I any I if had ruling could think more. change Analyst then Day about then. magnitude about And Chevron a timing, prebuy month know on don't I you a 'XX? guess of prebuy you I Okay. just but talked how that in we've the know. views X the

Yes.

Scott, I OEM. an I first not that think, sure want of make we're all, clear to we're

-- as us to business to and the on we're in a opportunity out. a gives got forward it more to because during term OEM. year have going for They more decisions. an as an So would prebuy short renew us earnings We're big doesn't of you pull customers some impact win going it pre-buy, an making the customers

But the will years. that come to next there's over business. win lease So for X an opportunity certainly the more in earnings

driver way a not it's X So big or the other.

You'll they for the way change. more a provide used will provide behaves does that a things have chase, the behave it for some did lift significant if years technology additional if capital does us equipment after opportunity probably it the it other the the in -- is technology work. Where because way

bought equipment more over the we're valuable become last more truck vehicles So technology that and economic the should the today they few as years market from used be standpoint. buying in those does [indiscernible] desirable and because older business that

happen how So to the relates Ryder. for it of XXXX. is, like happen? think think as should is I of the 'XX, that's probably It limits one. it it would should I in second I thing in the early? other really back mention when more would Will kind about think Ryder, half in I the Clearly, started prebuy I and the XXXX. start which mean, it you say -- mean I XXXX this can

it things. it pattern, half expect if be same see X follows to the in of -- starting the would could So clarify I second of 'XX. Scott, would probably you the

On from I we're we helping high it's to that that we range, QX our utilization assuming told are to back normalized the for will more on levels. -- be rental to you, high end that But I the us did get our end also to mention, QX. businesses clear, say of also the just want contractual

uplift for in versus... that in I we color to an a perspective, So for think looking gave where QX little we put you are Tom utilization. today And are

Yes.

QX we So XX%. finished

at We're number. today. that sitting around see You here XX%.

uptititude to X and percentage points, the up it's get. So seasonal expect that's

return a more X% obviously, it well. to improvement is that So little bit with as going bring

we're We up September. expect and So XX%. and should August some type of that We're quarter. way. is some to in that have we an It come to improvement the would behaving more come up at up early in come

where little color TBD at. but still that's So hopefully we're on give a you

seasonal, That improvement. feels X-point than that better little a But right?

No, kind seasonally. above than and right, go about see really. of we gets to And tends the then more to months, be That XX%, up, something next it what talking see start few to up seasonal. we continues not that it you're

Imbro with on moving to And Daniel Stephens.

One market. Dedicated third the on

I of EBT and then in how a noted the the guys an a revenue growth the from is You is obviously, of on I Cardinal. business lot the slides, we basis? the either growing If And DTS guess, the think Cardinal progressing. related, rest integration exclude

financial you that human the but curious appetite the enough or business deal of at integrate capacity, capital another today? have do You your of outside large bandwidth operational scale. Just to have

on on as the cases, some fleets in flattish operational line it you top primarily margin off of truck look because moving at growth excluding the into load. have the Cardinal, are if first, side. growing their downsizing Dedicated and So on Earnings flattish decisions was is but customers of kind holding where improvements,

the that's So first piece.

we -- bandwidth do around acquisition? I second we mean The another we piece have do could. to do

focused. This really pretty acquisition is for significant we're business. However, a that

focusing we've the We've deliver we So we're on in on we right million we and track it about $XX $XX making we're that outlined next got to really get million all sure this already to year that to at. X good do. is have where terms get activities and we synergies feel for of

found -- integrating as while but we to very it, one. another do [indiscernible] we And well. we're acquisition, going is integration we're selective during So going the this perfect been certainly period to and we haven't be

vehicle obviously follow-up Great. a coming on And prices XQ. new half. That's helpful. weighed bit, have on price truck job pressure chatter think OEM the I I was guide. could a moderating in question there least a sales some at the kept squeeze around And Used potentially back

remain that curious, So the outlook used that sales the are I'm guys just embedding you today? incorporated Is in into guide? vehicle pressured

continued the fourth end The low It -- I used probably the end into has Yes. as half, has is. in softness second our uplift to the some more mentioned, get quarter. truck is Well, the of we low no, end high the market. range as

question with Christyne Stanley. And from the McGarvey comes next Morgan

on just the business. supply Maybe chain

want Just a little to dig bit in more.

the what the guys year you omnichannel are it e-commerce about peak customers but to telling to top of of are what kind look call, of their half and as you the the outlook verticals at season. the alluded of volume back in you in sort seeing You currently

e-commerce in business. Steve that years. Sure. we're know, seeing And little a on what you business some in the well, more over had let that softness I'll color last we've as give X.X

Yes, of Thanks, we're Yes. I year-over-year. say now, flat would Christyne. kind right

of about the into nothing I'd seasonal projecting period, right point. -- think e-commerce flattish. significant now omnichannel you and peak the say still say specifically our you this more in nothing at getting customers are slight but mile uptick go would If last as kind a I business, into

no Mr. time, there Robert to back questions. remarks. to I'd call the additional this are for closing like over At turn Sanchez

you Okay. you call, a road. good Thanks for on to day. forward guys look Thank get and the seeing on being the all. we Have

you do We an And your conclude today's excellent conference. does thank for have that day. participation, and