Though Miami-based leasing and logistics conglomerate Ryder System believes its fourth-quarter earnings will hold true to estimates made earlier this year, it is revising its estimates down to reflect a falloff in business related to the September 11 terrorist attacks.
"After reviewing October results, it is clear that the economic activity post-September 11 has not substantially accelerated," said Gregory T. Swienton, Ryder’s president & CEO. "Since October is Ryder's strongest month historically, we are revising our estimates downward, as a sluggish economy is causing reduced activities across most of our service offerings and contracts."
Ryder, however, still thinks earnings for the fourth quarter of 2001 will be in the range of $0.38 to $0.40 per share, before restructuring and other charges, which matches analyst estimates of $0.38 to $0.42 per share, with a consensus of $0.40.
But its restructuring charges could wipe out those earnings. Currently, Ryder believes restructuring and other charges during the fourth quarter could range from $28 million to $35 million, or $0.31 to $0.39 per diluted share. The charges principally relate to exit costs associated with real estate consolidations in Ryder’s field operations, other contractual commitments and potential asset impairments associated with certain international operations.
"Like many companies, Ryder's results during the first three quarters of 2001 were negatively impacted by the weak U.S. and international economies," said C.J. Nelson, Ryder's CFO. "In the wake of September 11 and subsequent events, those weakened economies have continued to decline, further impacting our business and that of our clients."