RSC 'benefits from economic recovery'
By Lindsey Anderson08 February 2011
RSC Equipment Rental reported a 16.8 percent increase in total revenues to $339 million for the fourth quarter of 2010, with rental revenues at $287 million - an increase of 17.6 percent for the North American rental company.
The results come after RSC announced in mid-January that its 2010 fourth quarter results would be higher than it previously forecasted.
RSC said the results benefited from a 19.6 percent year-over-year increase in volume. The company's fourth quarter net loss also narrowed to $7 million, compared with a net loss of $29 million for the fourth quarter 2009 and RSC also increased its utilization by 20.2 percent from 56.3 percent in fourth quarter 2009 to 67.7 percent for the same period in 2010.
RSC's continued focus on the industrial market generated over 59 percent of the company's revenue, and the company also sold $89 million of fleet at original equipment costs.
Non-residential construction continued to decline for RSC, however, and Erik Olsson, RSC president and chief executive officer, anticipates the same trend for 2011's first quarter.
"We see continued strengthening in the industrial markets and signs that the non-residential markets are bottoming and beginning to turn," Olsson said. "At the same time, we are benefitting from a trend in the industry that favors renting equipment over committing capital to buy. Demand increases are broadly distributed over geographies and equipment types. As a result, we expect continued favorable year-over-year comparisons in the first quarter and are optimistic that these positive trends will continue throughout the year."
RSC invested $61 million into its fleet due to demand, the company said. Rental rates, meanwhile, dipped below the fourth quarter of 2010 by 1.9 percent, despite improving sequentially for the third consecutive quarter by 0.8 percent.
"During the challenging 2009 and 2010 periods, our strategic focus was on preparing every facet of our business for the anticipated recovery by investing in our fleet, footprint, people and technology. This preparation positioned us well as economic conditions improved, yielding volume growth, incremental price increases and margin expansion. We are excited about our prospects as our markets continue to benefit from the economic recovery."s