Rush Enterprises Profit Falls 25% But Beats Analysts' Expectations
Truck dealer Rush Enterprises Inc. reported third-quarter profit fell by 25%, blaming the continued softness on the lull in the oil industry.
“A sluggish energy sector, choppy freight environment, excess Class 8 fleet vehicle capacity, and low used truck values continued to negatively impact our new and used Class 8 truck sales and parts and service revenues in the third quarter,” said W.M. “Rusty” Rush, chairman and CEO of the San Antonio-based company.
Oil prices have fallen since their peak of $107 a barrel in June 2014, hitting a bottom of $26 in February. They have since recovered to around $50 a barrel.
Trucking fleets expanded during tAmerica’s shale oil boom of 2010 to 2014 as more tractor-trailers were needed to transport equipment throughout the vast and remote plays of Texas, North Dakota and elsewhere.
Rush Enterprises earned 37 cents per share in the third quarter, beating analysts’ estimates of 30 cents per share. The company was expected to generate $1.04 billion in revenue for the quarter, which Rush beat with $1.1 billion. Rush’s revenues were $1.29 billion in the year-ago period.
The company’s market capitalization peaked in 2014 at $1.3 billion before falling to $884.3 million the following year. Rush’s market value stood at $903.8 million on Oct. 25.
