Updated from 11:49 a.m. EST
said on Friday it would take a pre-tax charge of $42 million to $47 million, or 42 cents to 47 cents per share after taxes, stemming from its reorganization program.
The Miami-based company, which announced in late November plans to combine its
Ryder Transportation Services
Ryder Integrated Logistics
units, was trading up 3/4, or 3%, at 23 1/16 on the news. (Ryder finished up 1 5/16, or 6%, at 23 5/8.)
Greg Burns, an analyst for
Lazard Freres & Co.
, said the company was riding a "relief rally" now that Ryder had cleared away some of the uncertainty surrounding the bottom-line impact of its restructuring program.
"There's a sense the company has positive operating momentum," Burns said.
The company also projects earnings of $2.15 to $2.20 a share in 2000, well above Burns' forecast of $1.95. Lazard Freres rates Ryder a buy and does not do any underwriting for the firm.
At current levels, Burns said Ryder was cheap, noting that the company is trading at 10.5 times estimated 2000 earnings while the market was northward of 25 times.
The company, which provides rental trucks, trailers, and public transportation, said in a statement that its restructuring would result in a more efficient "one Ryder" format.
"The principal reasons for implementing this reorganization were to improve service to our clients, leverage Ryder's considerable competitive advantages and, as a result, increase shareholder value," Ryder chief executive M. Anthony Burns said.
Ryder also said that it had repurchased approximately $175 million of its stock. The company previously said it would use $200 million stemming from the sale of its
Public Transportation Services
subsidiary to repurchase its shares.
Ryder has completed about 88% of its buyback program and said it believed it would complete it by the end of 1999.
Ryder will also add
Ryder Capital Services
, a new captive finance subsidiary that should help to improve financing flexibility in the future, analysts said.
Tim Quillin, an analyst at
in Little Rock, Ark., who has a hold/neutral recommendation for Ryder, said he was considering reevaluating his rating "in a more positive way." Stephens has not done any underwriting for Ryder.
He has a 12-month price target of $24 for Ryder.