Ryder up slightly on supply chain unit
CHICAGO (Reuters) - Truck leasing and logistics company Ryder System Inc (R.N) posted slightly higher quarterly profit on Wednesday as its supply chain solutions business offset falling demand for commercial rentals amid the slowing U.S. economy.
Third-quarter net income edged up to $65.5 million, or $1.11 a share, from $65.3 million, or $1.06 a share, a year earlier.
Excluding one-time charges related to restructuring and pension costs, Ryder earned $1.14 a share. Analysts' average forecast was $1.13, according to Reuters Estimates.
Revenue rose to $1.65 billion from $1.62 billion. Analysts had expected $1.67 billion.
Miami-based Ryder cut its profit forecast in early October, saying softness in the economy had spread beyond the housing sector. Many U.S. trucking companies -- always among the first to benefit from an economic uptick and the first to be hurt when growth slows -- say the weakness has been largely restricted to the housing sector.
But some trucking executives, such as those at YRC Worldwide Inc (YRCW.O), have warned that the United States may be headed for a recession.
Ryder said third-quarter revenue at its supply chain solutions business rose to $554 million from $513.8 million a year earlier, but sales at its commercial rental unit fell to $155.0 million from $181.5 million.
Unlike Ryder's fixed-term contract business for leasing vehicle fleets, its commercial rental fleet uses short-term contracts, and business fluctuates with market demand.
"Our team continues to take appropriate steps to manage the business effectively in a softer economic environment," Chief Executive Greg Swienton said in a statement. "The actions we've already taken to reduce the commercial rental fleet size are expected to improve asset utilization levels going forward."
Ryder said it now expects fourth-quarter earnings of $1.06 to $1.11 a share. Analysts' average forecast is $1.09.
For the full year, Ryder expects $4.10 to $4.15 per share, compared with analysts' expectations of $4.13.
Ryder shares were down 70 cents, or 1.5 percent, to $46.67 in morning trade on the New York Stock Exchange. The shares hit a 52-week high of $57.70 on August 8 and a 52-week low of $45.25 on October 8, the day the company cut its outlook.
(Reporting by Nick Carey)
