Ryder System, Inc. reported earnings per diluted share (EPS) of $1.06 for the three-month period ended September 30, 2006, up 8% compared with $0.98 in the year-earlier period.
Earnings in the current period included a one-time, non-cash after- tax charge of $3.5 million to adjust the accounting for certain pension costs. Excluding this charge, EPS was up 14% to $1.12, compared with the company's previous EPS forecast range of $1.05 to $1.10 for the third quarter of 2006. EPS improvement reflects better business segment results and the impact of a stock repurchase program completed in February of 2006.
Net earnings for the third quarter of 2006 were $65.3 million compared with $63.3 million in the year-earlier period. Excluding the pension accounting charge, earnings were up 9% to $68.8 million driven by better operating performance and continuing leverage from revenue growth in the Supply Chain Solutions (SCS) and Dedicated Contract Carriage (DCC) segments.
Revenue for the third quarter of 2006 was $1.62 billion, up 9% from $1.49 billion in the comparable period last year with all business segments reporting revenue growth. Operating revenue (revenue excluding fuel and subcontracted transportation) was $1.14 billion, up 7% compared with $1.07 billion in the year-earlier period. Fleet Management Solutions (FMS) business segment revenue grew 5% driven by higher fuel services revenue and full service lease contract growth. SCS business segment revenue grew 19% in the third quarter of 2006 driven by higher volumes and new and expanded business in all industry groups, and an increase in managed subcontracted transportation. DCC business segment revenue increased 5% due to new and expanded business, and pricing increases associated with higher fuel costs.
Earnings for the third quarter of 2006 were negatively affected by a one-time, non-cash after-tax charge of $3.5 million recorded to adjust the accounting for prior service costs related to retiree pension benefit improvements made in 1995 and 2000. During the quarter, the company determined that these costs had not been amortized over the appropriate periods; however, the amounts involved were not material to the Company's financial statements in any individual prior period. The adjustment recorded resulted in a cumulative correction that reduced earnings for the quarter.