Investing.com -- Shares in Ryder System Inc (N:R) plunged by more than 7% in after-hours trading, after the transportation company downwardly revised its forward guidance for the third quarter and earnings outlook for the fiscal year as a whole.
The Miami-based transportation and supply chain management provider lowered its earnings estimate, after reporting lower than expected earnings growth over its current quarter in its fleet management solutions division. The company also said on Monday that it is experiencing lower demand than expected among its used vehicle division.
Consequently, Ryder System expects to report comparable per share earnings between 1.72 and 1.74 for its current quarter, down from previous forecasts of 1.82 to 1.87 for the three-month period. Analysts expect Ryder System to report comparable earnings of 1.86 per share, including exclusions for one-time items.
“We are confident that during the fourth quarter we will resolve the temporary execution issue related to our unprecedented growth. We have adjusted our technician labor model to accommodate this growth and are reducing out-of-service vehicles to a normalized level," Ryder Systems CEO Robert Sanchez said in a statement. "The lower outlook also accounts for our expectations of the used vehicle sales environment. In commercial rental, we anticipate continued strong demand, as evidenced by recent trends and supported by growth in the overall customer base."
"We are pleased that we continue to deliver increased year-over-year earnings, while also realizing strong top line revenue growth driven by secular outsourcing trends and the enhancements we’ve made to our sales and marketing efforts.”
Despite the subdued earnings outlook, Sanchez is optimistic that strong growth among the company's leasing division can partially offset the losses in other segments. For the entire year, Ryder System expects to realize lease fleet growth between 5,000 and 6,000, falling near the high end of prior estimates.
The company now expects to have full-year earnings per share of 6.17 to 6.29, down from previous forecasts of 6.45 to 6.55 per share.
Shares in Ryder Systems fell 5.39 or 7.13% to 70.25 in after-hours.