H&E Equipment Services Inc. reported fourth-quarter net income jumped to $85.9 million from $12.4 million a year earlier, factoring in December's federal tax overhaul.
The Baton Rouge company recorded a $58.4 million income tax benefit, compared to an income tax expense of $4.4 million in fourth-quarter 2016. The tax benefit came from a one-time re-measurement of H&E's deferred tax assets and liabilities, resulting from the decrease in the corporate federal income under the Tax Cuts and Jobs Act.
Per-share earnings were $2.40, compared to 35 cents in fourth-quarter 2016.
Total revenue increased 20.6 percent to $294.7 million in the fourth quarter from $244.3 million a year earlier. The company's revenue increases included equipment rentals, 10.9 percent to $127.7 million; new equipment sales, 65.9 percent to $74.4 million; used equipment sales, 28.8 percent to $32.1 million; and services, 2.6 percent to $15.8 million. Parts sales decreased 3.2 percent to $26.3 million.
“We expect 2018 to be a very opportunistic year for our business and industry given the current strength in the non-residential construction markets," said John Engquist, H&E Equipment Services’ chief executive officer.
He noted that oil prices are above a year ago, resulting in a rebound in exploration activity and energy-related projects. The new tax reform plan also could drive increased investment in construction, he said. Should the Trump administration and Congress pass an infrastructure bill, the industry could see an expanded cycle.
He said the company is focused on expanding its business in terms of both fleet size and geographic footprint.
H&E's annual revenue increased 5.3 percent to $1.0 billion from $978.1 million in 2016. Net income was $109.7 million, or $3.07 per share, compared to $37.2 million, or $1.05 per diluted share, in 2016.