Ryder revises earnings outlook, cuts 300 jobs

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Ryder System on Monday, Oct. 8, revised its earnings forecast primarily due to lower-than-expected results in its U.S. Fleet Management Solutions business segment. Economic conditions have softened considerably in more industries beyond those related to housing and construction, according to Ryder; consequently, freight and shipment levels have weakened to a greater extent than previously anticipated.

The impact to earnings is driven primarily by softer-than-anticipated demand in the commercial rental product line, as well as from lower pricing and higher carrying costs associated with used vehicles. As a result, the Miami-based company revised its comparable third-quarter 2007 earnings per diluted share forecast to a range of $1.12 to $1.14, down from the previous EPS range of $1.20 to $1.23. Comparable third-quarter 2006 EPS were $1.12.

Additionally, Ryder expects a third-quarter gain of about $10 million from the sale of a property; the gain is expected to be more than offset by restructuring charges of about $12 million in the third quarter. These charges were incurred in connection with a restructuring plan involving the elimination of about 300 positions across various business segments and global geographies, Ryder says; the majority of the recurring positive financial impact from these actions is expected to benefit results in 2008.

Reported third-quarter 2007 GAAP EPS are expected to range from $1.09 to $1.11, which includes a $0.03 net restructuring and other charge, as previously noted. Reported third-quarter 2006 GAAP EPS were $1.06, which included a $0.06 pension accounting charge.

Ryder anticipates softer economic conditions to continue through the fourth quarter. In view of these conditions, the company is revising its comparable full-year 2007 EPS forecast to a range of $4.10 to $4.15, down from the previous EPS forecast range of $4.30 to $4.35. The revised full-year EPS forecast represents an improvement from comparable EPS in the prior year of $3.99. Reported full-year 2007 GAAP EPS are forecast to be in the range of $4.07 to $4.12, which includes the previously discussed charges from restructuring and other items. Reported full-year 2006 GAAP EPS were $4.04, which included a net $0.05 charge from tax law changes and a pension accounting charge.