H&E Equipment Services Inc., a Baton Rouge heavy equipment sales and rental firm, reported third-quarter earnings of $4.8 million, or 14 cents per share, compared with a loss of $3.8 million, or 11 cents per share, a year ago.
The company increased revenue by 19.8 percent to $184.3 million. The company also boosted its rental business and rental rates.
In a conference call with stock analysts and investors, H&E Equipment President and Chief Executive Officer John Engquist said the company recorded another strong quarter and expects the bottom line to “improve dramatically” in the fourth quarter.
Engquist said the company achieved solid performance during the third quarter despite modest improvements in the construction industry. Although the industrial sector is steady, commercial construction is recovering slowly and residential construction showed little to no improvement, he said.
H&E’s rental revenue jumped more than 25 percent compared with a year ago, Engquist said, and the company expects the demand for rental equipment to remain strong.
Rental revenue was $61.2 million, compared to $48.3 million a year ago.
H&E’s earnings also benefited from stronger sales in used equipment. The company posted $27.2 million in used equipment sales, an 85 percent increase over the $14.7 million recorded during the third quarter of 2010.
Engquist said the company expects a positive fourth quarter.
H&E expects strong demand for rental equipment based on current trends and discussions with customers, he said.
However, the third quarter may be H&E’s peak for 2011, Engquist said. Customers are looking at whether to make capital expenditures before the end of the year, but there is no guarantee that spending will take place.
Stock analysts surveyed by Thomson Reuters had forecast third-quarter earnings of 7 cents per share. Investors reacted favorably to Thursday’s earnings report, sending H&E shares up $1.33 to close Thursday at $12.18.