Equipment Rental Firm Herc Posts Mixed Q2 Results As Local Market Growth Slows
Herc Holdings Inc (NYSE:HRI) reported second-quarter FY24 sales growth of 6% year-on-year to $848 million, beating the analyst consensus estimate of $832.02 million.
The revenue growth was due to an increase in equipment rental revenue of $63 million, reflecting positive pricing of 3.5% and increased volume of 6.4%.
Total expenses for the quarter increased 8% to $755 million. Adjusted EBITDA increased 2%, with the adjusted EBITDA margin compressing to 42.5%.
Adjusted EPS of $2.60 missed the analyst consensus estimate of $2.91.
Herc held $70 million in cash and equivalents as of June-end, with a total fleet of approximately $6.7 billion at OEC.
Operating cash flow for six months totaled $558 million, and the free cash flow was $148 million.
“Overall, our record second quarter revenue results came in according to our expectations. However, while national mega projects are on plan, we saw a greater deceleration in the local market’s growth trajectory versus our forecast, primarily driven by the persistently higher interest-rate environment,” said President and CEO Larry Silber.
Outlook Reaffirmed: Herc affirmed its FY24 equipment rental revenue growth guidance of 7% – 10% and adjusted EBITDA of $1.55 billion – $1.60 billion.
Price Action: HRI shares are trading higher by 2.20% at $147.44 on the last check Tuesday.