Ryder System Inc.
) recently slashed its EPS guidance for the second quarter of 2012
as well as for full fiscal 2012, primarily based on lower demand
for commercial rental rates for trucks and higher medical benefit
Ryder expects its EPS for the second quarter of 2012 to remain
in the range of 90 to 95 cents, down from its previous outlook of
$1.07 to $1.12. Similarly, the company also expects EPS for full
fiscal 2012 to remain in the range of $3.65 to $3.85, much lower
than its earlier mentioned guidance of $4.02 to $4.12.
Ryder remains cautious regarding its growth prospects for fiscal
2012, primarily due to sluggish demand in the trucking industry.
This is also expected to persist til the end of the year.
Chief among the company's remedial measures to deal with the
situation include the downsizing its commercial fleet size, thereby
utilizing used vehicle inventories. The company also believes that
if the cost cutting measures are successfully implemented, it will
boosts its EPS by 18 cents in the third quarter of 2012.
In the first quarter of fiscal 2012, Ryder reported adjusted
earnings of 59 cents that surpassed the Zacks Consensus Estimate by
a penny. The company reported revenue of $1,536.3 million, which
also outpaced the Zacks Consensus Estimate of $1,516 million.
Currently, the company is currently increasing investment in
fleet management solutions, which is telling on its cash balance.
Moreover, stiff competition from peers like
) could limit the near-term growth for the company.
Currently, Ryder has a Zacks #3 Rank, implying a short-term Hold
rating on the stock.
Ryder System Inc. is a Florida corporation founded in 1933, and
recognized as the world's largest provider of integrated logistics
and transportation solutions.
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