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Art and logistics business Ryder System beating fourth quarter earnings estimates today shares of the trucking and giant logistics -- getting hammered down nearly 7%.
Cutting its 2012 forecast.
All right with a transportation sector often providing key economic Bellwether is this a sign.
Of troubling times ahead for the US recovery joining us now on the Fox Business exclusive -- as water system chairman and CEO.
-- -- and Greg good to see again thank you it's a tough day for -- it's always tough when your stock goes down 8%.
It was the earnings forecast that that was really raise a red flag for investors.
And part of that has to do with the fact in your pension costs.
Are just exorbitant you guys that are very generous to your pensioners but how do you get that under control.
Well it all has to do with the calculation done at the end of the year on the returns on December 31 as well as the discount rate.
And in fact the the pension impact year over year is eighteen cents when we put our forecast out for 2012 the -- It was four dollars to four dollars and ten.
And we said that embedded in that four dollars -- ten was the eighteen cents so for those analysts who were around 410411.
Not anticipating the pension impact.
You can add eighteen cents since they were really operationally doing for twenty to 428 in fact if you strip out pension.
This will be our strongest year of comparable EPS compared to where peak in 2008 so.
I can't totally explain the market sometimes but I think they're not as weak as you just indicated.
Okay from where you stand maybe so let's let's talk -- -- about what your business is looking at an and we should just remind people.
You help big companies manage their fleets and supply chains.
So you are very dependent aren't people buying more stuff that will then need to be shipped.
What do you see out there in the trenches right now how does the US economy look.
It's sort of the same as what we said the last couple years slowly modest improvement still bumpy.
But improving we're forecasting.
More increased lease sales maintenance.
Rental rental we're predicting in 2012 to be up 17%.
Of that so that's transactional activity that's driving -- action.
The use truck sales prices are up there is nothing fundamental that we see that is weakening in fact we think it's strengthening a bit.
Now your fleet divisions is the biggest of course but -- the your fastest growing division is the supply chain solutions.
At a -- warehousing as such is that mean because the economy on the streets is move and a little slower than you would like you're focusing more on warehousing and other things.
Not I think it's -- We we have up a business model that considers all these -- stick together.
So if if someone needs to Lisa truck haven't maintained get a rental.
Do dedicated contract carriage with the driver or do warehousing.
Opportunity for us and even for our shareholders is when we combine those so if is if a customer needs.
Warehousing logistics operations center drivers -- vehicles that we provided that we hit a home run for for us for ourselves and for our investors.
Well let me just quickly finish out with something that might seem a little particular but it matters because the president has announced he would give tax incentives.
To truck companies or at least companies that have fleets that convert over to natural gas -- what how will that affect your business is that a good thing.
I think it would be good I think we're always cautious about -- Government spending these days but at the same time this is a subject that relates even the national security.
Anytime we can be more in our energy it depended independent.
Utilize their own resources and drill for what we have -- -- natural gas we think that's a good idea and in fact.
We've had a lead in this by what we've already done in California Arizona Michigan so we're already playing there with natural gas vehicles so we think that's the plots are you working -- -- -- on that.
I've met Boone Pickens I'm and I'm in favor of a natural gas anything that utilizes American -- is free enterprise in this country I think is a good idea.
Correct slept through Ryder System chairman and CEO with the palm trees behind it thanks a lot refrigerator.
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