Ryder System – R – Revised earnings guidance for the second quarter and full year 2012

Ryder System, Inc. (NYSE: R) revised its earnings guidance for the second quarter and full year 2012 primarily due to lower than expected results in its Fleet Management Solutions (FMS) business segment. The lower FMS results reflect a reduced demand environment primarily for the commercial rental product line, and actions taken to reduce used vehicle inventories. Additionally, unusually high company-wide medical benefit costs are expected to reduce earnings by approximately $0.05 per diluted share in the quarter. Performance in Ryder’s contractual full service lease product line and Supply Chain Solutions operations is expected to be improved year-over-year and in line with the Company’s previous forecast. Based on these factors, the Company has revised its comparable second quarter 2012 earnings forecast to a range of $0.90 to $0.95 per diluted share, down from the previous forecast of $1.07 to $1.12.

• Ryder ( R ) Q2 Comparable EPS Forecast Lowered to $0.90 to $0.95, from $1.07 to $1.12
• Ryder ( R ) Full Year 2012 Comparable EPS Forecast Lowered to $3.65 to $3.85, from $4.02 to $4.12
• Lower Forecast Driven by Reduced Commercial Rental Demand and Actions Taken to Reduce Used Vehicle Inventories
• Continued Modest Year-Over-Year Growth Expected for Contractual Businesses
• Ryder ( R ) Revised Full Year Comparable EPS Forecast Up 5-10% from $3.49 in 2011
• Comparable Q2 and Full Year EPS Exclude $0.10 Restructuring Charge for Cost Reduction Actions

Although commercial rental revenue has improved both year-over-year and seasonally, May results reflected lower rental growth than previously discussed in Ryder’s most recent forecast. This was caused by lower than expected demand and, to a lesser extent, pricing. The Company expects a slower demand environment to continue through 2012. As a result, the Company is reducing the size of its commercial rental fleet through the balance of the year, resulting in higher used vehicle inventories. Retail sales of used vehicles (including pricing) has remained stable; however, the Company has increased used vehicle wholesaling activity, resulting in lower used vehicle sales results. The Company expects higher levels of wholesale activity over the balance of the year, and anticipates used vehicle inventories to remain somewhat elevated during that period. The Company anticipates continued stable pricing for retail sales of used vehicles.

Ryder’s contractual full service lease product line is expected to perform generally in line with the Company’s previous forecast for the second quarter. The Company’s year-to-date lease fleet growth has remained in line with expectations. However, in view of recent reports of lowered expectations for the broader economy, the Company has reduced its forecast for lease fleet growth in the second half of 2012.

About Ryder – R

Ryder System, Inc. ( R ) is a FORTUNE 500^® commercial transportation, logistics and supply chain management solutions company.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.