Ryder System on Monday reduced its earnings guidance for 2015, citing temporary problems related to the growth of its fleet-management business.
Ryder shares fell 6% to $71.10 in extended trading after the company said it expects third-quarter earnings of $1.72 to $1.74 a share, down from a range of $1.82 to $1.87 a share. For the year, Ryder lowered expected earnings to a range of $6.17 to $6.29 a share, from a previous forecast of $6.45 to $6.55 a share.
Analysts surveyed by FactSet had estimated earnings of $1.86 a share for the third quarter and $6.49 a share for the year.
Ryder attributed the reduced outlook in part to “a greater than planned number of out-of-service vehicles during the quarter, as maintenance technicians were supporting new levels of fleet growth across all product lines.”
“The elevated level of out-of-service vehicles resulted in lower than expected rental utilization” of 76.4% in the third quarter, the company said in a news release.
“We are confident that during the fourth quarter we will resolve the temporary execution issue related to our unprecedented growth,” CEO Robert Sanchez said. “We have adjusted our technician labor model to accommodate this growth and are reducing out-of-service vehicles to a normalized level.”
Lower-than-expected sales of used power vehicles in the U.S. have also impacted earnings, Ryder said.
The company expects the performance of its Dedicated Transportation Solutions and Supply Chain Solutions business segments to remain generally in line with its previous forecast. Third-quarter earnings will be released Oct. 22.