Herc Holdings reported third quarter equipment rental revenues of $413.1 million compared to $360.3 million in last year’s third quarter, a 14.7-percent hike. Total third quarter revenues were $457.6 million compared to $403.6 million in the third quarter of 2016, a 13.4-percent increase. Herc posted net income of $12.8 million compared to net income of $3 million for the same period last year, a 326.7 percent boost.
Average fleet at original equipment cost increased 3.2 percent and overall pricing improved 1.7 percent in the third quarter on a year-over-year basis. Adjusted EBITDA leapt 16.2 percent to $176.7 million, compared to $152.1 million in the year-ago frame.
“Our strategy to expand our fleet and diversify our customer mix drove our double-digit increases in third quarter rental revenues over the prior year,” said Larry Silber, president and CEO. “Higher levels of equipment on rent and improved pricing also contributed positively to our year-over-year increase in dollar utilization, which increased 350 basis points to 38.7 percent.
“Our third quarter results validate our strategic initiatives and business transformation efforts, which enabled solid rental revenue growth throughout North America. Construction trends and leading economic indicators support estimates of continued strength in the rental equipment industry and contribute to the confidence we have in our business strategy.”
Herc officials said the equipment rental revenue increase reflected growth across all Herc’s regions. Average fleet unavailable for rent in the month of September was 12.9 percent compared to 13.1 percent in September 2016, an improvement in equipment turnaround times.
Dollar utilization rose 350 basis points, Herc said compared to the year-ago period, and 470 basis points compared to the second quarter.
For the first nine months of 2017, equipment rental revenues increased 8.9 percent to $1,084.5 million, compared to $996 million in the first nine months of 2016. Rates increased 1.4 percent for the nine-month period.
Herc reported a net loss for the first nine months of 2017 of $54 million, including $29.5 million in impairment charges. The net loss for the first nine months of 2016 was $6.5 million.
Direct operating expenses totaled $526.2 million for the first nine months of 2017, compared to $487.8 million in the first nine months of 2016, primarily because of higher rental-revenue related costs such as transportation expenses and investments in branch operating personnel to support revenue growth.
To meet strong rental market demand, Herc now expects to spend approximately $355 million to $365 million in net fleet capital expenditures for the full year, an increase from the previous guidance in the range of $275 million to $325 million.
Bonita Springs, Fla.-based Herc Rentals is No. 3 on the RER 100.
