TSC Ratings' Updates: Tyson

Ryder has improved earnings per share by 12.6% in the most recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, Ryder increased its bottom line by earning $4.26 vs. $4.04 in the prior year. This year, the market expects an improvement in earnings ($4.48 vs. $4.26).

The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the road and rail industry average. Net income increased by 7.1% when compared to the same quarter one year prior, going from $65.53 million to $70.21 million.

The return on equity has improved slightly. This can be construed as a modest strength in the organization. Compared to other companies in the road and rail industry and the overall market on the basis of return on equity, Ryder has underperformed the industry but has exceeded that of the S&P 500.

The gross profit margin for Ryder is rather low, currently at 22%. Regardless of Ryder's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, Ryder's net profit margin of 4.30% is significantly lower than the same period one year prior.

Currently the debt-to-equity ratio of 1.65 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, Ryder maintains a poor quick ratio of 0.82, which illustrates the inability to avoid short-term cash problems.