Construction and industrial equipment services provider H&E Equipment Services, Inc. (HEES) reported Wednesday a sharp decline in its first-quarter earnings per share, in line with analysts' estimates, reflecting lower rental rates and a softness in construction projects in the seasonally slow quarter.
For the first quarter, net income fell to $2.18 million or $0.06 per share from $10.21 million or $0.28 per share in the previous year. On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.06 per share in the first quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter declined 24.2% to $186.2 million from $245.8 million in the same period last year. Three analysts expected the company to report revenue of $207.47 million in the first quarter.
Equipment rental revenues declined 22.1% year-over-year to $55.5 million from $71.2 million. New equipment sales dipped 16.1% to $64.1 million from $76.4 million, while used equipment sales dropped 61.1% to $16.1 million from $41.4 million and parts sales decreased 10% to $26 million from $28.9 million in the year-ago period. Service revenues for the quarter decreased 6.8% to $15.5 million from $16.6 million in the past year, while other revenues also declined to $9.082 million from $11.289 million in the prior year.
John Engquist, H&E Equipment Services' chief executive officer, noted that the first quarter is normally the softest period of the year and said that in the prevalent challenging economy lending was virtually frozen for construction projects.
"During the first quarter, the industry continued to experience tremendous rate and pricing pressure as our rental rates decreased 9.9%", noted Engquist.
Selling, general and administrative expenses for the quarter reduced 16.1% to $39.1 million from $46.7 million, mainly because of lower wages, incentive pay, benefit and employee-related costs as a result of recent workforce trimming.
Interest expense decreased to $8.2 million from $10.2 million a year ago as a result of lower average interest rates, debt under the senior secured credit facility and floor plan payable outstanding.
HEES is currently trading at $6.76, down $0.69 or 9.26%, on the Nasdaq.
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