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Integrated logistics and transportation solutions, Ryder Systems Inc. (R - Analyst Report) is set to release its third-quarter 2013 results before the opening bell on Oct 22, 2013.

In the last quarter, the company delivered a 2.46% earnings surprise. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

We remain encouraged about Ryder’s organic growth across its business line. Strong market demand along with a tighter truck market is allowing the company to charge more thus boosting the earning prospect. The Florida-based company expects enhanced offerings in contractual product lines in the fleet management segment with a newer lease fleet and various maintenance initiatives to improve 2013 earnings.

An extended freight recession has forced the company to downsize its lease and contract maintenance customers. However, downsizing its customer fleet may affect the company’s full service lease business going forward. Stiff completion also remains a threat to Ryder as it could create downward pressure on rates and thereafter affect margins.

Earnings Whispers

Our proven model does not conclusively show that Ryder is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Negative Zacks ESP:This is because the Most Accurate Estimate stands at $1.43 while the Zacks Consensus Estimate is higher at $1.44. This leads to an ESP of -0.69% for Ryder.

Zacks Rank:Ryder’s Zacks Rank #3 (Hold), however, increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings surprise call.

We caution investors against the stock going into the earnings announcement, as a Zacks earnings ESP of -0.69% combined with a Zacks Rank #3 lowers the possibility of an earnings surprise.

Other Stocks to Consider

Here are some companies to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

XPO Logistics Inc. (XPO - Snapshot Report) has earnings ESP of +20.46% and carries a Zacks Rank #3 (Hold).

Kansas City Southern(KSU - Analyst Report)has earnings ESP of +0.90% and carries a Zacks Rank #3 (Hold).

Fedex Corp. (FDX - Analyst Report) has earnings ESP of +0.62% and carries a Zacks Rank #3 (Hold).

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