Hertz revenues stable in third quarter
03 November 2010
Hertz Equipment Rental Corp (HERC) reported a 0.2% rise in revenues to US$281.2 million for the third quarter of 2010 to 30 September. It is the first time in two years that the company has posted growth in the third quarter.
The business made a pre-tax profit of $33.7 million, an increase of 33.7% on the same period in 2009. Hertz said the profit improvement was primarily the result of increased volumes and lower operating costs.
Mark Frissora, executive chairman and chief executive officer, speaking to analysts in a conference call, said; "We saw continued improvement across all metrics from a sequential monthly perspective. During the third quarter, we benefited from a stabilizing environment, a favorable year-over-year comparison and a continued growth of the industrial market driving higher utilization. The trend is definitely moving in the right direction."
The third quarter improvement included a 20.6% increase in rentals to the industrial sector, which meant that HERC as a whole increased industrial rentals to 25.6% of its North American business compared to 21.5% a year ago.
Elyse Douglas - Chief Financial Officer and Executive Vice President; "Our strategy to shift more of our equipment mix to this category is benefiting us as facility maintenance, petrochem refining, energy services and oil and natural gas exploration continue to add new products and restart deferred projects."
Mr Frissora also commented on the company's business in China; "We've put together a fairly aggressive strategy in China for both the Equipment Rental and Rent-A-Car. We've now got four locations in each...Everywhere we open up, we've been successful. We're making money in Equipment Rental already, and the growth is double-digit very rapidly once the store is opened and established in that area."
(Note: Quotations from the Hertz conference call courtesy of Seeking Alpha website.)