Ryder System, Inc. (NYSE:R) Q2 2015 Earnings Conference Call Transcript
Jul 23, 2015 • 11:00 am ET
Good morning, and welcome to Ryder System Inc.'s Second Quarter 2015 Earning Release Conference Call. All lines are in a listen-only mode until after the presentation. (Operator Instructions) Today's call is being recorded. If you have any objections, please disconnect at this time.
I would like to introduce Mr. Bob Brunn, Vice President, Corporate Strategy and Investor Relations for Ryder. Mr. Brunn, you may begin.
Thanks very much. Good morning, and welcome to Ryder's second quarter 2015 earnings conference call. (Forward-looking Cautionary Statements) Presenting on today's call are Robert Sanchez, Chairman and Chief Executive Officer, and Art Garcia, Executive Vice President and Chief Financial Officer. Additionally, Dennis Cooke, President of Global Fleet Management Solutions, John Diez, President of Dedicated Transportation Solutions, and Steve Sensing, President of Global Supply Chain Solutions, are on the call today and available for questions following the presentation.
With that, let me turn it over to Robert.
Good morning, everyone, and thanks for joining us. This morning we'll recap our second quarter 2015 results, review the asset management area, and discuss the current outlook for our business. Then we'll open up the call for questions.
With that, let's turn to an overview of our second quarter results. Comparable earnings per share from continuing operations were a record $1.65 for the second quarter 2015, up from $1.44 in the prior year. This is an improvement of $0.21, or 15%. Our results came in above our second quarter forecast range of $1.58 to $1.63. The beat was driven largely by better-than-expected supply chain results. Second quarter comparable results exclude non-operating pension costs of $0.05 and professional fees of $0.02, which were partially offset by a $0.03 benefit from state tax law changes.
Operating revenue, which excludes fuel and subcontracted transportation revenue, was up by 6% to a record $1.4 billion for the second quarter and increased in all business segments. Excluding the impact of foreign exchange, operating revenue grew by 8% in the quarter. Total revenue declined primarily due to lower fuel costs passed through to customers as well as foreign exchange.
Page 5 includes some additional information for the second quarter. The number of diluted shares outstanding for the quarter increased to 53.3 million shares, up from the 53 million shares in the prior year. In January, we temporarily paused share repurchase activity because our balance sheet leverage was nearing the high end of our target range of 225 to 275. Because our leverage is still near the high end of our range, share repurchase activity remains temporarily paused. We'll evaluate resuming anti-dilutive share repurchases later in the year.
Excluding pension costs and other items, the comparable tax rate was 37.2%, consistent with the prior year. The comparable tax rate was in line with our expectations for the quarter and did not result in EPS out-performance during the quarter. Page 6 highlights key financial statistics on a year-to-date basis. Operating revenue was up 5% to $2.7 billion. Comparable EPS from continuing operations were $2.73, up 16% from the