Third-Quarter Earnings Slides Knock Share Values Downward


After a second round of third-quarter 2009 financial results were released last week, the RER Reports Stock Block reported declines by all but two of the companies it reports Friday-ending results for each week. The two companies whose stocks were up over the previous week at the close of the market on Friday were Gorman-Rupp Co., which the previous week reported a 23.9-percent decline in sales over its third-quarter 2008 sales, but last week declared a quarterly cash dividend of 10.5 cents per share on the common stock — its 239th consecutive dividend paid to shareholders — and Qualcomm, which closed 1.5-percent higher than the previous week at $41.33. Qualcomm began its fiscal 2010 first quarter on Sept. 28.

Top RER 100 rental giants United Rentals, RSC Equipment Rentals and Hertz Equipment Rental Co. parent Hertz Global Holdings all closed at the end of trading on The New York Stock Exchange Friday down over the previous week. Shares of United Rentals dropped 10 percent to $9.49 over the week-long period from $10.56 the previous week after reporting a 32-percent total revenue loss and a 43-percent rental revenue tumble in the 2009 third quarter. Shares of United Rentals were down 12 percent from its end-of-week trading two weeks ago.

Shares of RSC dipped 9.5 percent for the week to $6.74 from $7.45 the previous week after reports of the company's 35.1-percent rental revenue drop, and 13 percent from its end-of-trading close of $7.75 two weeks ago. RSC's total revenues were down 32.4 percent in the third quarter.

Hertz Global Holdings, parent company of Hertz Equipment Rental Corp., last week reported a 15.7-percent decline in worldwide revenues and a 35.2-percent dip in its worldwide equipment rental revenues for the third quarter. Its stock closed Friday at $9.31, down 7 percent from $10.03 the previous week.

Reporting even greater 3Q09 losses last week were equipment manufacturers Haulotte Group (58.8 percent) and Manitou Group (47 percent). Haulotte closed trading on the Paris Stock Exchange Friday at $7.80, a 4.6-percent dip over the previous week's closing. Manitou, also traded on the Paris Exchange, closed at $9.90, down 11-percent over the prior week.

Despite the week's predominant share losses, there was some good news reported last week from Terex CEO Ron DeFeo, who told investors listening to the company's third-quarter conference call that Terex has “turned the corner.”

“Certainly the feeling of positive momentum is not yet seen in our results, and many of our customers continue to suffer from a lack of work and for our dealers and rental companies, a lack of financing,” said DeFeo. “Furthermore, we continue to face the challenges of pricing pressure, bad debt, inventory write downs and idle equipment. However, the corner we think is being turned and there is a sense that in places away from the United States that business is clearly returning. This is the case in India, China and in South America.”

While acknowledging that those markets cannot offset the steep declines in Europe and the United States, DeFeo said, “We do see some positive signs in Europe and as conditions remain stable, we would expect to be growing again in the United States in 2010.”

We'll keep an eye on the stock market and continue to report on the trends we observe. To view the latest RER Stock Block, visit Notice an industry-related stock missing from our report that you'd like us to follow? Let us know. Email Brandey Smith at

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Michael Roth

Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a...

Gary Stansberry

Gary Stansberry is president of The Stansberry Firm LLC and specializes in business sales, fair market business valuations, operational consulting and positioning businesses to increase their value.
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