04.05.2016

Sales rise at H&E

US based H&E Equipment reported a solid rise in revenues thanks to its distribution business, while profits slipped.

Total revenues were $247 million nine percent higher than in the same period last year, due entirely to higher sales of new and used equipment and service, Rental revenues improved slightly. Pre-tax profits however fell seven percent to $9.5 million, due to the different business mix and higher rental costs on flat sales.

Chief executive John Engquist said: “The ongoing strength in our rental business coupled with an unexpected increase in demand from our distribution business produced solid results for the first quarter. Non-residential construction activity in our end user markets, especially the industrial sector, remains strong. Demand for rental equipment continued to increase during the quarter compared to a year ago and as we anticipated, rates remained near year ago levels. Our rental business, specifically earthmoving equipment and cranes, did face some headwinds during the quarter resulting from the heavy rains and associated flooding that occurred in Louisiana, Texas and Arkansas, and the continued weakness in the oil patch. New equipment sales exceeded our expectations during the quarter primarily as a result of higher earthmoving sales, but we do not currently anticipate this level of activity to continue during the remainder of the year.”

“As we move further into 2016, our outlook remains positive as the non-residential construction markets we serve remain healthy. Our Gulf Coast market has continued to be the sweet spot for our business due to the high levels of industrial activity, new non-residential construction starts and demand from a wide array of the large capital projects breaking ground.”

Vertikal Comment

A surprising result with new equipment sales jumping at a time when the market is difficult. The company is doing well in spite of the slowdown in the oil & gas industry which is a major influence in the company’s home state and other areas where it is strong.

Most encouraging.