Rush 2Q Earnings, Revenue Climb on Truck Sales
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Truck dealership Rush Enterprises reported higher net income and revenue on strong aftermarket activity and new truck sales, especially medium-duty.
For the period ended June 30, net income rose to $41.6 million, or $1.10 per diluted share, on revenue of $1.54 billion. That compared with net income of $29.4 million, or 72 cents, on revenue of $1.34 billion a year earlier.
The company announced a 1-cent increase in its quarterly cash dividend, lifting it to 13 cents per share — its first increase since it announced its intent to begin paying a quarterly cash dividend in July 2018.
Rush
“A healthy economy, widespread activity in the commercial vehicle market and the continued execution of our aftermarket strategic initiatives positively impacted our results in the second quarter,” W.M. “Rusty” Rush, chairman and CEO of Rush Enterprises, said in a company release. Our truck sales outpaced the commercial vehicle market in both Class 8 and Class 4-7, and we achieved record performance in medium-duty truck sales this quarter.”
New and used commercial sales increased to $1 billion compared with $857 million a year earlier.
Industrywide, new U.S. Class 8 retail truck sales were 72,835 units in the second quarter, up 19.8% over the same period last year, according to ACT Research.
Given a full backlog and being in the seasonally weakest period of the year for orders, there is little to suggest a near-term Class 8 order volume rebound. #HeavyDuty, #Class8 https://t.co/YvR2G3n7YN pic.twitter.com/uVlViulNrd — ACT Research (@actresearch) July 19, 2019
Rush sold 4,119 Class 8 trucks in the second quarter, an increase of 28% compared with the second quarter of 2018, and accounted for 5.7% of the new U.S. Class 8 truck market, according to the San Antonio-based company.
It sold 3,866 new Class 4-7 medium-duty commercial vehicles in the quarter, an increase of 11.3% compared to the second quarter of 2018, and accounted for 5.5% of the U.S. Class 4-7 commercial vehicle market. ACT forecasts U.S. retail sales for Class 4-7 vehicles to reach 262,300 units in 2019, a 1.5% increase over 2018.
Parts, service and collision center revenues reached $448.2 million, up 6% compared with the second quarter of 2018.
“RushCare Parts Connect, our comprehensive online e-commerce source for all-makes parts, is gaining traction with customers, and we are optimistic about its potential to generate revenues in the future,” Rush said.
XPress Service by Rush Truck Centers
The company achieved a quarterly absorption ratio of 122.4% in the second quarter of 2019.
Rush calculates absorption ratio by dividing the gross profit from the parts, service and body shop departments by the overhead expenses of all of a dealership’s departments, except for the selling expenses of the new and used commercial vehicle departments and carrying costs of new and used commercial vehicle inventory.
Net income for the six-month period was $78.7 million, or $2.08, on revenue of $2.8 billion. That compared with $50.4 million, or $1.23, on revenue of $2.6 billion.
The company owns and operates Rush Truck Centers, the largest network of commercial vehicle dealerships in the United States, with more than 100 dealership locations in 22 states. It represents truck manufacturers, including Peterbilt, International, Hino, Isuzu, Ford and Mitsubishi.
