US-based company H&E Equipment Services said strength in its rental business coupled with an unexpected increase in demand from its distribution business produced solid results in the first quarter.
Revenues increased 8.6% year-on-year to US$247 million (€213 million) in the first three months of 2016, while net income was US$5.6 million (€4.8 million) compared to US$6.1 million (€5.3 million) a year ago. Rental revenues increased 1.4% year-on-year to US$103 million (€89 million).
Average time utilisation (based on units available for rent) was 64.6% compared to 64.2% in the first quarter of 2015. Average rental rates decreased 0.1% compared to a year ago.
CEO John Engquist said, “The ongoing strength in our rental business coupled with an unexpected increase in demand from our distribution business produced solid results for the first quarter.
“Non-residential construction activity in our end user markets, especially the industrial sector, remains strong. Demand for rental equipment continued to increase during the quarter compared to a year ago and as we anticipated, rates remained near year ago levels.
“Our rental business, specifically earthmoving equipment and cranes, did face some headwinds during the quarter resulting from the heavy rains and associated flooding that occurred in Louisiana, Texas and Arkansas, and the continued weakness in the oil patch.
"New equipment sales exceeded our expectations during the quarter primarily as a result of higher earthmoving sales, but we do not currently anticipate this level of activity to continue during the remainder of the year.”
And Mr Engquist said the company had a positive outlook for 2016, fuelled by healthy non-residential construction markets.
“Our Gulf Coast market has continued to be the sweet spot for our business due to the high levels of industrial activity, new non-residential construction starts and demand from a wide array of the large capital projects breaking ground,” he said.