Stocks to Watch

Stocks to watch Friday: Ryder, Arch Coal

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WASHINGTON (MarketWatch) — Among the stocks that could see active trade in Friday’s session are Ryder System Inc., Arch Coal Inc. and Medtronic Inc.

Friday brings Darden Restaurants Inc. DRI, +0.11%  and Carnival Corp. CCL, -4.94%   CUK, -5.70%  as the only companies scheduled to report quarterly results.

Standard & Poor’s said Monster Beverage Corp. MNST, +0.14%  will take the place of Sara Lee Corp. SLE, -14.00%  in the S&P; 500 index SPX, +0.11%, effective after the close of trading June 28. Hillshire Brands Co., the Sara Lee “stub” that’s trading on a when-issued basis, in turn will replace Monster Beverage in the S&P; MidCap 400 index. Sara Lee’s spinning off its international coffee and tea business to stockholders. Separately, S&P; said Alexander & Baldwin Inc. will replace Patriot Coal Corp. PCX, +1.07%  in the S&P; MidCap 400 index after the close on June 29. Alexander & Baldwin Holdings Inc. ALEX, +0.92%   is spinning off Alexander & Baldwin Inc., with stub company Matson Inc. to remain an S&P; MidCap 400 component.

Ryder R, +1.33%  lowered its second-quarter and full-year profit forecasts, citing expectations for “a slower-demand environment to continue through 2012.” Along with a slowdown in commercial rentals, the Miami-based company pointed to efforts to downsize its fleet of vehicles as well. As revised, management pegged projected earnings in a range of of 90 cents to 95 cents a share for the second quarter, down from $1.07 to $1.12 a share previously. And for 2012, Ryder set an estimated range between $3.65 to $3.85 a share, lower than the $4.02 to $4.12 a share previously forecast. According to a poll by FactSet Research, the consensus of analysts had been for quarterly and full-year profits of $1.10 a share and $4.09 a share, respectively. The revised forecast for the second quarter also reflects “unusually high company-wide medical benefit costs,” expected to cut earnings by about 5 cents a share, Ryder said. Also late Thursday, the company announced cost-reduction initiatives expected to benefit earnings over the second half of 2012 to the tune of 18 cents a share. These will result in a pre-tax restructuring charge estimated at about 10 cents a share; Ryder’s updated forecast excludes this charge. “These actions will not dilute our focus on delivering excellent customer service and pursuing significant new business opportunities,” said Greg Swienton, Ryder’s chairman and chief executive, in a statement.

Arch Coal ACI, +0.14% said it would take one-time charges of about $425 million as asset writedowns against results for the second quarter, in conjunction with the company’s plan to idle several mining operations in Kentucky, Virginia and West Virginia. Along with other recent changes made in operations in the coal-producing Appalachia region, this will result in a total workforce reduction of about 750 full-time employees. About $14 million in severance and related costs will be taken between the second and third quarters, according to the St. Louis-based company. Arch also anticipates a non-cash goodwill impairment charge for the three months ended June 30. The company’s moving to reduce annual production of thermal coal by more than 3 million tons, as a result of what it called an “unprecedented downturn in demand for coal-based electricity.” Said John Eaves, Arch’s president and CEO: “Current market pressures and a challenging regulatory environment have pushed coal consumption in the United States to a 20-year low.” Arch may choose to sell off noncore assets or reserves, he added.

Medtronic’s board declared a quarterly dividend of 26 cents a share, representing a 7% increase, the maker of implantable medical devices MDT, +0.26%  said. It’s payable July 27 to stockholders of record as of July 6. It marks the 35th straight year in which Medtronic has increased dividend payments. “We are committed to returning 50% of our free cash flow each year through dividends and share repurchases,” said Omar Ishrak, chairman and CEO, in a statement. During fiscal 2012, the company repurchased 37 million shares of its common stock. Under its share-buyback program, Minneapolis-based Medtronic may make purchases from time to time in the open market.

Calumet Specialty Products Partners LP CLMT, +3.34%  and wholly owned Calumet Finance Corp. increased the size of a debt offering made via private placement. As revised, Calumet priced $275 million of 9.625% senior unsecured notes at 98.25% of par. The offering of the 8-year notes had been pegged at $250 million previously. Net proceeds will be placed in escrow pending completion of Calumet’s acquisition of lubricants manufacturer Royal Purple Inc., a $335 million deal announced earlier this month that’s expected to close in July. The private placement is scheduled to close June 29, according to Indianapolis-based Calumet.

Associated Estates Realty Corp. AEC, +14.29%  plans to sell 5.5 million common shares in a secondary offering, the Cleveland-based real estate investment trust said. Net proceeds will be used to fund property acquisitions and development and for general corporate purposes, including making temporary repayment of outstanding balances under its unsecured revolving credit facility, Associated said. All shares in the public offering will be sold under Associated’s shelf registration declared effective by the Securities and Exchange Commission. Underwriters will have a 30-day option to buy up to 825,000 additional shares.