- The shares have their biggest one-day drop since June 2012
- Slowed rentals and truck sales are hurting company's results
Ryder System Inc. plummeted the most among Standard & Poor’s 500 Index members after the rental-trucking company reduced its full-year profit forecast because of a higher-than-expected number of out-of-service vehicles.
Earnings per share will rise to $6.17 to $6.29 for the year, less than the previous forecast of $6.45 to $6.55, the company said in a statement late Monday. That compares with the $5.58 reported for 2014, Ryder said.
An increase in the company’s fleet consumed the attention of workers to the point where the number of unused vehicles that needed maintenance hurt rentals in the third quarter. The issue is expected to be resolved in the fourth quarter, Miami-based Ryder said. Sales of used trucks were also less than expected, particularly in September, and will continue to be low through the end of the year, the company said.
“Commercial rental is always the most volatile and variable piece of Ryder’s business, so it did not surprise us that it had some dislocations,” David Ross, a transportation analyst for Stifel, Nicolaus & Co. with a buy rating on the shares, wrote in a note. However, “We don’t think the stock should be down as much as buyers think today,” he said in a telephone interview.
Ryder fell 9.3 percent, the most since June 2012, to $68.63 at the close in New York. That extended the stock’s decline to 26 percent this year.
Third-quarter earnings were $1.72 to $1.74 a share, Ryder said. Spokeswoman Cindy Hass declined to comment on the fleet issue ahead of the release of the quarter’s full results on Oct. 22.