Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Ryder System Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Ryder System (NYSE: R  ) sank 13% on Friday after the truck leasing company slashed its current-quarter and full-year earnings forecast.

So what: Ryder shares have been crushed in recent months on worries over weak global business activity, and today's second-quarter guidance cut -- management sees EPS of $0.90-$0.95 versus its prior view of $1.07-$1.12 -- naturally reinforces those fears. Management cited soft commercial truck rental demand and higher medical benefit costs as the main reasons for the disappointing outlook, forcing several analysts to lower their growth expectations on the stock.

Now what: Looking further ahead, management now sees full-year 2012 EPS of $3.65-$3.85, down significantly from its earlier view of $4.02-$4.12. "We are responding with timely and appropriate business adjustments and cost management initiatives to address economic headwinds that are expected to continue through the remainder of the year," Chairman and CEO Greg Swienton cautioned. Of course, when you couple management's swift efforts to reduce its commercial fleet with the likelihood that Ryder's leasing segment should be able to offset some of that decline, today's share-price pullback seems a tad overdone.  

Interested in more info on Ryder? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1921542, ~/Articles/ArticleHandler.aspx, 10/26/2016 5:30:22 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 4:02 PM
R $69.22 Up +3.15 +4.77%
Ryder System CAPS Rating: ****