Big US renters look for second half improvement
By Murray Pollok28 April 2010
First quarter 2010 financial results from three of the largest US rental companies - United Rentals, RSC Equipment Rental and Hertz Equipment Rental Co (HERC) - show continuing difficult conditions but signs of improvement.
All three companies posted declines in revenues in the first quarter compared to the same period in 2009. In RSC's case total revenues fell by 25.8% to US$261 million; at HERC sales fell by 15.2% to $237.0 million; and at United Rentals revenues were down 19.5% to $478 million.
HERC made a pre-tax loss of $5 million for the period; RSC showed a net loss of $38 million and United's net losses in the quarter were $40 million.
Mark Frissora, Hertz chairman and chief executive officer, said; "The equipment rental business continues to be challenged, although we are experiencing improving performance in Canada and Europe, and we believe the US business has begun emerging from the trough of the recession."
At RSC, chief executive officer Erik Olsson, described the economy as "still-challenging" but said it had managed to drive utilisation up and had built up momentum through the quarter; ""We continue to expect 2010 to be a year of transition, with demand bottoming out, followed by a modest recovery in the second half."
Michael Kneeland, chief executive officer of United Rentals, said, "Twelve months ago, we were in the midst of an economic free fall in our end markets. Today we see signs of a more positive outlook for our industry, with the foremost indicator being used equipment prices.
"We fought back against the economic and seasonal challenges of the first quarter by holding firm on time utilization and mitigating the decline in rates. Our top line, while temporarily impacted by demand, reflects our shift toward a more optimal revenue mix. We are serving our most profitable customers more effectively and at lower cost. We now expect to outperform our initial estimates for SG&A savings and free cash flow this year."