### Ryder's Earnings Report Analysis

Ryder System’s stock price is up more than 80% in the last year—more than 23% in a month—despite challenges in the freight market.

#### Earnings Highlights

The quarterly report shows that Ryder is not experiencing much improvement from underlying freight market conditions. However, there was a solid performance attributed to its own initiatives and the impact of used vehicle sales.

- **Fleet Management Solutions (FMS)**: 1% increase in revenue year-on-year.
- **Supply Chain Solutions (SCS)**: 2% increase in revenue.
- **Dedicated Transportation Solutions (DTS)**: 8% drop in revenue.

Ultimately, used vehicle sales contributed significantly, enabling a 6% increase in earnings before taxes. This was emphasized in the earnings announcement, highlighting its role in the company's performance.

#### Leadership Changes and Strategic Shifts

During his first earnings call as CEO, John Diez noted significant changes since 2018 when vehicle leasing was the main profit driver. Now, SCS and DTS account for about 60% of revenue (up from 44% in 2018). Despite this shift, used vehicle sales remain a focal point, with Diez indicating a strategy to reduce reliance on revenue from these sales.

- **Non-GAAP earnings**: $2.54 in Q1, beating forecasts.
- **Free cash flow**: Rose to $273 million from $259 million.

#### Used Vehicle Market Outlook

Diez expressed cautious optimism regarding the used vehicle market, suggesting potential stronger conditions might emerge this year. Ryder anticipates about $500 million in used vehicle sales proceeds for the year, consistent with previous years.

Future earnings could increase substantially due to:
- **Potential $250 million annual pretax earnings increase** from improved vehicle sales.
- Inflation in new vehicle pricing could also support used vehicle pricing.

#### Regulatory Impact on Sales

Changes in regulations may affect the market for used vehicles, particularly for trucks. With over 60% of Ryder's used inventory consisting of trucks, the regulatory environment could influence sales and pricing, especially for sleeper cabs.

#### Quarterly Performance Metrics

Despite challenges, some metrics remained positive:
- **Sales Mix**: Retail sales constituted 61% of sales in Q1, versus 56% a year ago.
- **Vehicles sold**: 4,600, down from the previous year but up sequentially.
- **Analyst Sentiment**: Positive feedback regarding earnings projections, with revised price targets reflecting confidence in Ryder's growth strategies.

As of Friday at 2:45 p.m. EDT, Ryder stock traded at $251.56, up from previous values.