New Account Growth Propels HERC Rental Volume in Third Quarter

Total worldwide equipment rental revenues decreased 3 percent for Hertz Equipment Rental Corp. in the third quarter, $401 million compared to $413 million in the third quarter a year ago.

Michael Roth

Nov. 10, 2015

2 min read

Specialty segments and new accounts from small local contractors were the strongest revenue areas for HERC in the third quarter.

Total worldwide equipment rental revenues decreased 3 percent for Hertz Equipment Rental Corp. in the third quarter, $401 million compared to $413 million in the third quarter a year ago. Excluding the impact of foreign currency, revenue increased $2 million, or 1 percent.

However rental volume increased 3 percent, driven by new account growth, predominantly derived from small local contractors and specialty segments as HERC diversifies its business. The company said pricing for the third quarter was flat year over year.

Worldwide revenues were negatively affected by continuing weak performance in stores serving upstream oil-and-gas markets during the quarter. In North America, revenue in these upstream oil-and-gas markets decreased 26 percent year over year on a constant currency basis, while non–oil-and-gas revenue increased 14 percent. In response to the continued weakness in oil-and-gas markets, HERC reduced its equipment fleet in this segment by 16 percent in the third quarter year over year.

Worldwide equipment rental adjusted pre-tax income for the third quarter of 2015 was $54 million, a decrease from $79 million in the previous year’s third quarter. Adjusted corporate EBITDA for the quarter 2 was $164 million compared to $178 million in Q314.

Hertz Global CEO John Tague said the company remains on track for the separation of HERC as a stand-alone company.

About the Author

Michael Roth

Editor

Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.