RSC makes gains but prices remain 'challenging'
By Murray Pollok22 October 2010
RSC Equipment Rental reported a 5.7% increase in revenues to US$334 million for the third quarter of 2010, with rental revenues up 7.3% to $292 million. RSC made a net loss of $6 million in the period, the same as in the equivalent quarter of 2009.
The company said the industrial market - which it described as its primary end-market - improved in the third quarter and is expected to continue to improve in the final three months of the year. Non-residential construction declined slightly in the third quarter and RSC said it expected this decline to extend into the final quarter, although at a slower rate.
RSC said overall fleet levels continue to exceed demand and as a result rental rates remain under pressure and will be "challenging" in the fourth quarter.
Erik Olsson, president and chief executive officer, said; "The positive momentum from the second quarter strengthened into the third quarter with strong volume growth of 12% and solid positive sequential pricing of 2.6%.
"Market demand has steadily improved during the year and we expect favourable year-over-year comparisons in the fourth quarter as we have seen the momentum from the third quarter continue in October."
The company reported that rental rates had improved sequentially from the second quarter but were still 4.4% lower than the third quarter of 2009. Average fleet utilisation rates were 68.7% in the third quarter, up from 63.5% in the second quarter.
During the three months the company made gross fleet investments of $119 million - "in response to growing demand" - and sold $69 million of fleet (at original cost).