Rush Sees Decline in Q1 Income
April 26, 2013
Rush's first quarter parts, service and body shop revenues reached a new record quarterly high of $231.5 million.
Rush Enterprises' first-quarter income was down from a year ago on lower truck sales, despite achieving record parts, service and body shop revenues. Net income dropped from $15.9 million, or 40 cents per share, last year, to $13.5 million, or 34 cent per share. Rush reported a 2.6% drop in sales to $756.8 million.
Class 8 truck sales, not unexpectedly, were down by 673 units on declining demand from the energy sector. Sales of Class 4-7 medium-duty vehicles increased 26% over the first quarter of 2012, outpacing the U.S. Class 4-7 market, which decreased 2% overall. Sales of light-duty trucks was up 43%.
"U.S. Class 8 truck sales were well below normal replacement levels in the first quarter," said Rusty Rush, CEO and President of Rush Enterprises, Inc. "However, our quoting activity remains strong, which should lead to stronger retail sales later this year."
By Class, Rush sold 2,065 new Class 8 trucks in the first quarter, 1,954 new Class 4-7 medium-duty trucks, and 395 new light-duty trucks. The company also moved 1,414 used trucks.
First quarter parts, service and body shop revenues reached a new record quarterly high of $231.5 million, increasing by 18% compared to first quarter 2012 ($196.6 million) despite the usual decrease due to seasonality experienced during the first quarter.
"Our aftermarket success this quarter is the result of continued maintenance of aged vehicles, incremental revenues generated from newly acquired locations and innovative aftermarket solutions," said Rusty Rush.
"Despite the decline in the energy sector activity and integration of newly acquired locations in Ohio, we were able to achieve a quarterly absorption ratio of 111.9%," explained Rusty Rush.
Industry experts forecast U.S. Class 8 retail truck sales to remain flat with 2012 at 198,000 units.
"We believe that steady U.S. Class 8 order intake over the past several months combined with increased activity in residential construction in key regions of the country will likely result in increased Class 8 retail truck deliveries beginning in the second half of 2013. U.S. Class 4-7 retail sales are expected to reach 182,000 units, up 11% over 2012," continued Rusty Rush.