Ben Moore

Ben Moore from Citi asked about the due diligence process for the Wells Fargo portfolio, specifically if it was completely done or if there were any surprises post-acquisition.

Answer

Bob Lyons, President and CEO, confirmed that due diligence was thorough, and there were 'very few, if any, surprises at closing,' with the acquired fleet largely matching expectations regarding car types and customer base.

Ben Moore asked for an update on the due diligence process for the Wells Fargo portfolio, specifically if it was completely done or if there were any surprises post-acquisition.

Answer

Bob Lyons, President and Chief Executive Officer, confirmed that the due diligence was thorough and there were very few, if any, surprises at closing. He stated that the acquired fleet, including car types and customer base, was largely as expected.

Ben Moore from Citigroup inquired about GATX's strategy to achieve its Q4 EPS guidance, which is above consensus, and the long-term outlook for elevated remarketing income through 2027, considering inflation and freight car mix.

Answer

President and CEO Bob Lyons explained that strong Q4 remarketing income from a robust asset sale pipeline and high demand would be the primary driver for meeting guidance. He also noted that the secondary market is expected to remain strong in the coming years due to balanced new car supply and strong buyer appetite, making it a viable growth alternative.

Ben Moore inquired about the expected cadence for used vehicle gains through 2026, particularly for Q1, and the impact of government enforcement on capacity and used truck pricing. He also asked about the magnitude and recent signings of new Supply Chain Solutions business.

Answer

John Diez, Executive Vice President and Chief Financial Officer, and Thomas Havens, President of Fleet Management Solutions, discussed that used vehicle gains are expected to gradually improve, with Q1 consistent with Q4 2025. Tractor pricing is expected to improve, while truck pricing remains depressed. They noted that capacity is exiting the market, which is beneficial long-term, and driver-related policy changes primarily affect the for-hire carrier market, having minimal impact on Ryder's truck-heavy used vehicle inventory. Robert Sanchez, Chairman and Chief Executive Officer, and Steven Sensing, President of Supply Chain Solutions and Dedicated Transportation Solutions, highlighted record SCS sales in 2025, with benefits layering in from Q2 and Q3 2026, driven by expansion sales and execution.

Ben Moore inquired about the expected cadence of used vehicle sales gains for 2026, including the outlook for Q1 and subsequent quarters, and the impact of government policies on capacity and used truck pricing. He also asked about the magnitude and timing of new Supply Chain Solutions (SCS) business signings.

Answer

John Diez, Executive Vice President and Chief Financial Officer, and Thomas Havens, President of Fleet Management Solutions, indicated a gradual improvement in used vehicle sales throughout 2026, with Q1 expected to be consistent with Q4 2025. They anticipate tractor pricing to improve in the second half, while truck pricing may remain depressed. John Diez noted that capacity is exiting the market, which is beneficial long-term, and that driver-side policies primarily impact the for-hire carrier market, with minimal impact on Ryder's predominantly truck inventory. Robert E. Sanchez, Chairman and CEO, and Steven Sensing, President of Supply Chain Solutions and Dedicated Transportation Solutions, highlighted a record sales year for SCS in 2025, with benefits layering in from Q2 and more significantly in Q3 2026, driven by expansion sales and execution.

Ben Moore asked about Ryder's strong sales performance in Supply Chain Solutions (SCS) and recent developments in its tech incubator, including Ryder Guide, Ryder Share, and Ryder Ship. He also inquired about the use of AI in load board and broker apps and how Ryder's tech supports logistics managers and outsourcers.

Answer

John Diez, President and COO, highlighted that investments in customer-facing technologies like Ryder Share and Ryder Ship are significant differentiators driving strong sales activity in SCS. He added that Ryder is deploying GenTech AI technologies to improve service levels and effectiveness in transportation management, brokerage, and freight bill audit and pay activities across all business segments.

Ben Moore asked about current retailer restocking trends and when an inflection might occur. He also inquired about Saia's expectations for 35%-40% incremental margins on excess capacity and the long-term target of a sub-80 operating ratio.

Answer

President and CEO Fritz Holzgrefe noted that supply chain management appears to be stabilizing, with less volatility than six months prior, but no accelerated restocking. He reiterated that a sub-80 operating ratio is the expected return on the $2 billion capital investment, with some mature parts of the network already operating in the upper 70s. EVP and CFO Matt Batteh confirmed that 30%-40%+ incremental margins are expected in an uptick environment, especially in new markets, due to scaling fixed costs.

Ben Moore asked about current retailer restocking trends and the potential inflection point, as well as Saia's expectations for incremental margins on excess capacity and progress towards its long-term sub-80 operating ratio target.

Answer

Fritz Holzgrefe, President and CEO, noted that restocking appears to be stabilizing towards a more normalized supply chain management, with less volatility than six months prior. Regarding incremental margins, Fritz confirmed that the expectation for the $2 billion capital investment is a sub-80 operating ratio, with parts of the network already operating in the upper 70s. Matt Batteh, EVP and CFO, reiterated the expectation of 30%-40% incremental margins in an uptick environment, especially for newer markets, emphasizing the long-term nature and scaling potential of the investments.

Ben Moore, on for Ari Rosa at Citigroup, asked how much of Saia's recent pricing strength is due to its service value catching up versus the expanded network reach. He also questioned if the service decline in a recent survey was due to a small customer base in new markets or temporary operational issues.

Answer

CEO Fritz Holzgrefe responded that the pricing strength is a function of 'all of the above,' as the expanded network allows Saia to replicate its high service levels for more customers, justifying the value. Regarding the survey, he attributed the results to the challenges of rapid growth, including onboarding many new employees and entering new markets, and reiterated that the company is focused on continuous improvement.

Ben Moore asked about the impact of the 1Q storm on inland and coastal volumes/pricing, how current utilization (94%) might progress, and the company's potential participation in the Venezuelan oil complex (inbound crude, refined products, outbound diluents). He also inquired about parsing 4Q power generation growth into lumpiness versus sustained acceleration and whether the revenue outlook would be adjusted higher.

Answer

CEO David Grzebinski noted the winter storm positively impacted power generation (trailer rentals). President and COO Christian O'Neil added that for marine, ice on the Illinois River slows navigation but is contractually protected, and Gulf Coast refiners/chemical plants saw no major production interruptions, potentially being a net positive for utility. Regarding Venezuela, Christian O'Neil stated Kirby would primarily benefit from increased refining of heavier crude in the Gulf, leading to more barge movements of intermediates, rather than international crude/diluent transport. David Grzebinski explained that power generation growth is constrained by OEM supply, leading to lumpiness, and while backlog is strong (up 11% sequentially, 30% year-over-year), the 10-20% annual growth outlook remains, with potential for higher growth post-OEM capacity expansions in 1-2 years. He emphasized the real, cash-flow-driven demand for power.

Ben Moore inquired about the impact of the Q1 storm on inland and coastal volumes and pricing, current utilization progression, and the potential effects of the Venezuelan oil complex on Kirby's marine movements. He also asked for a breakdown of Q4 power generation growth (lumpiness vs. sustained acceleration) and if the 10%-20% year-over-year revenue outlook would be adjusted higher.

Answer

David Grzebinski, CEO, noted the winter storm positively impacted power generation rentals. Christian O'Neil, President and COO, reported minimal major production interruptions from the cold weather, potentially tightening the market. For Venezuela, Christian O'Neil expects benefits from refining heavier crude (more barge movements for heavies/intermediates) but not international crude/diluent moves. David Grzebinski explained power generation growth is constrained by OEM supply, leading to lumpiness, and advised focusing on the full-year 10%-20% growth, citing strong backlog. He emphasized the real demand for power, distinguishing it from a speculative bubble.

Ben Moore inquired about the drivers behind the strong gross margin, specifically asking for color on pricing trends, especially in the context of sharing tariff costs with customers. He also questioned the raised EPS guidance with an unchanged revenue guide, implying cost-side opportunities, and asked if the implied Q4 EPS being below consensus was due to below-the-line items. Additionally, he asked about Wabtec's experience with the CPKC merger and how it might inform potential future mergers like UPNS or BNCSX, particularly regarding increased locomotive activity and volume growth from truck.

Answer

CFO John Olin stated that pricing is one of the four levers being worked, contributing a marginal amount to Q3 revenue, but not a core driver of the gross margin strength. He clarified that Wabtec doesn't comment on consensus but expects a very strong Q4 with implied revenue growth of 11.25% and EPS growth of about 24%. President and CEO Rafael Santana, while not commenting on specific mergers, viewed potential consolidations as significant opportunities for increased carloads and rail volumes over time. He emphasized that temporary fleet reductions during consolidation often overlook the bigger picture of fleet dynamics, where aged fleets and DC locomotives necessitate modernization and new acquisitions as a non-discretionary lever for improving operating ratios, service quality, and competitiveness.

Ben Moore asked for more color on pricing trends within the strong gross margin performance, especially in the context of sharing tariffs with customers. He also questioned the implied Q4 EPS being below consensus despite a raised EPS guide and held revenue guide, asking if it was due to below-the-line items. Finally, he inquired about the potential impact of proposed mergers like UPNS, drawing parallels to the CPKC merger's effect on locomotive activity and volume.

Answer

CFO John Olin confirmed that pricing is one of the four levers being used to address costs, with a marginal amount included in Q3 revenue, but noted there's still work to be done. He declined to comment on consensus but stated confidence in a strong Q4, with an implied midpoint of 11.25% revenue growth and approximately 24% EPS growth. President and CEO Rafael Santana refrained from commenting on specific mergers but viewed such consolidations as significant opportunities for increased car loads and rail volumes over time. He reiterated that fleet renewal is not discretionary, driven by the age of fleets and the high cost of maintaining older units, which ultimately triggers modernization or new acquisitions.