Reuters: Global Markets: Ryder System falls on slashed profit outlook

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Ryder System falls on slashed profit outlook Jun 22nd 2012, 14:48 Fri Jun 22, 2012 10:48am EDT (Reuters) - Shares of Ryder System Inc (R.N) fell as much as 12 percent on Friday after the logistics company cut its quarterly earnings forecast, citing lower demand at its main commercial rental business. Commercial rental is part of Ryder's fleet management segment that accounted for almost 64 percent of the company's total revenue in 2011. Ryder does leasing, contract maintenance and commercial rental of trucks, tractors and trailers. The company plans to cut costs and reduce its commercial rental fleet as it expects the weakness to continue through the year, it said on Thursday. The fall in commercial rental was greater than-anticipated, and its leasing segment has not been strong enough to offset the decline, BB&T Capital Markets analyst Kevin Sterling wrote in a note to clients. Weakening business activity worldwide is hitting U.S. companies where it hurts, with more of them signaling disappointing results than at any time over the past decade. Package delivery major FedEx Corp (FDX.N) on Tuesday forecast a first-quarter below analyst's expectations and said it is stepping up cost-cutting measures to protect margins. Sterling cut his price target on the stock to $60 from $75, but maintained his "buy" on the stock. The analyst said an aging trucking fleet will drive demand for leasing, given the rising cost of new equipment. Two other brokerages also slashed their price targets on the stock after the cut in outlook. FBR Capital Markets cut its target by $10 to $55, while Stifel, Nicolaus & Co lowered its to $64 from $74. Ryder shares fell $4.60 to $36.13 on the New York Stock Exchange on Friday morning. They touched a low of $35.80. (Reporting by Bijoy Koyitty in Bangalore; Editing by Sreejiraj Eluvangal) Link this Share this Digg this Email Reprints

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