Ryder Surges as 2013 Profit Forecast Beats Estimates
Ryder System Inc. (R) rose to the highest price in a year after the largest publicly traded truck lessor predicted higher 2013 earnings than analysts estimated.
The forecast of $4.70 to $4.85 a share compares with an average projection of $4.57. That excludes non-operating pension expenses of 24 cents, which Ryder began removing from comparable earnings-per-share data this year, according to a statement.
Ryder has been buoyed as a recovering U.S. economy spurs customers to renew leases, helping the truck lessor improve rates and trim maintenance costs, Art Hatfield, of Raymond James Financial Inc., said in a telephone interview. The Miami-based company projected sales this year will jump about 3.9 percent to about $6.5 billion. That’s in line with estimates of about $6.47 billion.
“The truck market and truck-related things are going to continue to improve a little bit as we get into 2013,” said Hatfield, who’s based in Memphis, Tennessee. Customers prone to extending their leases as long as possible during the slump, which drove up maintenance costs, “are feeling a little bit better about life and so as vehicles are coming to the end of their lease, they’re renewing.”
Ryder rose 4.6 percent to $56.78 at the close in New York, the highest price since Feb. 1.
Fourth-quarter profit excluding restructuring costs and vehicle losses from Hurricane Sandy was $1.17 a share, surpassing the $1.10 average estimate compiled by Bloomberg. Sales climbed 2.8 percent to $1.58 billion, higher than the $1.56 billion average projection.
Net income, including a $5.1 million after-tax charge for damages from Sandy as well as other items, rose 12 percent to $53.8 million, or $1.05 a share. Profit on the same basis a year earlier was $48.1 million, or 93 cents.
Ryder is pausing its plan to buy back as many as 2 million shares after pension charges drove the company’s ratio of total obligations to equity to 270 percent, Robert Sanchez, who replaced Greg Swienton as chief executive officer on Jan. 1, said on a conference call today.
Suspending the buyback program will help Ryder “maintain near-term balance sheet flexibility,” he said. The company expects to reinstate the stock buybacks “at some point in the future,” he said.
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