04.11.2010

H&E sees positive trend

Louisiana based H&E Equipment has reported improved third quarter rental revenues, while losses grow.

Total revenues for the nine months to the end of September were $399.5 million a fall of almost 27 percent on the same period last year. The company also made a pre-tax loss in the period of 413.3 million, compared to a profit this time last year of $1.2 million.

The third quarter showed strong gains across the board compared to the second quarter, but was down over 12 percent overall on the same quarter last year to $153.8 million. However rental income for the quarter was up seven percent to $48.2 million. Pre-tax losses also increased from a loss of $2.5 million last year to $5.8 million this year.

John Engquist, H&E chief executive said: "Market conditions continued to improve during the third quarter and as a result, areas of our business delivered solid sequential gains. Total revenue increased 17.4 percent when compared to the second quarter, driven by continued growth in our rental business and increased new equipment sales. Due to improving rental demand, we increased both our overall rental capacity and the physical utilisation of our fleet.”

“We were also very pleased to achieve sequential rental rate improvement of 1.8 percent. As a result, rental revenue increased 15.8 percent from the second quarter and seven percent from a year ago. Our third quarter results also reflected significant increases in rental gross profit and margins on both a sequential and on a year over year basis."

"All of these factors indicate our environment is improving and we are positioned to take advantage of continuing improvements in our end markets," Engquist concluded. "In October, our rental business performed at levels we have not experienced since early in 2009, at which time we were maintaining $100 million more in rental assets. However, while we are very encouraged by the current activity, we remain cautious regarding the balance of this year due to potential seasonality issues and on-going economic challenges in several of our markets. We hope to see continued improvement throughout 2011."