Baton Rouge-based H&E Equipment Services Inc. rode a stronger economy to net income of $10.5 million, or 30 cents per share, a 280 percent increase over the $2.7 million, or 8 cents per share, a year ago.
The results were well above the 22 cents per share forecast of stock analysts surveyed by Thomson Reuters.
Demand for heavy equipment, both new and rentals, was solid, particularly along the Gulf Coast with its healthy energy-related activity, H&E President and Chief Executive Officer John Engquist said in a news release.
A modest recovery in commercial construction is also increasing demand for rental equipment, he said. H&E is approaching its prior record levels of rental demand, and the company’s rental fleet is the biggest it has ever been.
“Based on the strong demand and improved rental pricing, we plan to further expand our fleet through the remainder of this year. Rental rates improved 11 percent from a year ago and 5 percent from the first quarter,” Engquist said. “ New equipment sales remain difficult to predict, but bidding activity for hydraulic cranes used in the energy sector is encouraging.”
Engquist said the overall economic environment is hard to predict, but the trends in H&E’s markets are positive.
The company is opening two new locations in Texas and is also evaluating expansion opportunities in other markets.
H&E’s revenue increased 13.4 percent to $209 million. Rental revenue increased 26.4 percent to $35.2 million. The rental segment’s profit margin was 24.7 percent, compared to 19.1 percent a year ago.