Herc Rentals posted equipment rental revenues of $350.8 million for the second quarter, compared to $327.9 million in the second quarter of 2016, a 7-percent year-over-year boost. Total revenues for the quarter were $415.8 million compared to $380.4 million in the year-ago quarter, a 9.3-percent hike.
Herc reported a net loss of $27.6 million, or $0.98 per diluted share, in the second quarter of 2017, compared to a net loss of $8 million, or $0.28 per diluted share, for the same period last year.
Average fleet at original equipment cost increased 4.7 percent and overall pricing improved 1.4 percent in the second quarter of 2017, compared to the prior-year period. Rental revenues in key markets increased, excluding foreign currency, improved 8.9 percent, and pricing in key markets improved 1.5 percent year over year.
The second quarter results included impairment charges of $29.3 million, consisting primarily of a write-off related to Herc’s decision to discontinue the development of new information technology systems initiated prior to the company’s spin-off from Hertz last year. The quarter was also impacted by an increase of $18.3 million in interest expense related to debt issued in 2016.
“We are pleased to note that our equipment rental revenue growth accelerated in the second quarter,” said Larry Silber, president and CEO of Herc Rentals. “Demand and pricing continued to improve year over year and our initiatives to diversify our fleet and expand our customer base are driving top-line growth. Upstream oil and gas markets appear to be stabilizing after more than two years of year-over-year declines. In addition, overall dollar utilization improved to 34 percent, the first year-over-year improvement since the initial downturn in oil and gas markets.
“We have accomplished a great deal in our first year as a stand-alone company. We are continuing to complete the separation from our former parent and implement major initiatives to grow our business and improve our operating efficiencies. We are encouraged by improving fundamentals in the rental equipment industry and remain confident in our strategy.”
Silber explained why Herc decided to discontinue the development of new information technology systems initiated prior to the spin-off. “We will transition the legacy industry-standard systems that we have been using and redirect our investments to upgrade and enhance their functionality,” Silber noted. “This decision puts us on a solid path to achieve what’s best for the business by leveraging our existing resources.”
Average fleet unavailable for rent was 13.1 percent in June 2017, compared to 13.3 percent in June 2016, reflecting continued focus on improving equipment turnaround times. Also dollar utilization of 34 percent in the second quarter was up 50 basis points compared to the year-ago quarter, and up 200 basis points from the first quarter.
For the first half of the year, equipment rental revenues were $671.4, compared to $635.7 million in the previous year’s first half, a 5.6-percent step. Revenue growth in key markets more than offset lower revenues in upstream oil-and-gas markets. Total revenues for the first half were $805.2 million compared to $746 million in the first half of 2016, a 7.9-percent jump.
Herc Rentals, based in Bonita Springs, Fla., is No. 3 on the RER 100.