Ryder Shares Sink on Revised Forecast (R, CNW, FDX)

Shares of Ryder System Inc. (NYSE: R), the truck rental and leasing firm, are getting pummeled today following last night’s revisions to the company’s second quarter and full fiscal year forecasts. The second quarter EPS forecast was lowered from $1.07-$1.12 to $0.90-$0.95, which includes $0.05/share for higher medical benefit costs. For the full fiscal year, the company lowered its EPS forecast from $4.02-$4.12 to $3.65-$3.85. The company has met or exceeded earnings in each of its last four quarters.

In our recent look at the trucking industry and its relationship to overall US economic growth, we looked at several trucking companies, including Con-Way Inc. (NYSE: CNW), which today raised its freight rate for non-contract business by 6.9%, matching a similar increase from FedEx Corp. (NYSE: FDX) earlier this month.

Ryder is seeing a drop-off in demand for its commercial rental products, and the company is projecting continued weakness through the rest of this year. To combat the problem, Ryder is reducing its rental fleet, which is throwing more vehicles into its used vehicle inventory. The company said sales remain “stable,” but the added inventory lowers results. Ryder also expects used vehicle inventory to remain higher through the end of 2012.

Ryder’s shares are off -13.3% at $35.35 in a 52-week range of $34.28-$60.38. Con-Way shares are down -2% at $35.13 in a 52-week range of $20.56-$42.38.

Paul Ausick