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New Braunfels-based Rush Enterprises posted a profit Wednesday of 31 cents per share, matching Wall Street expectations. Fourth-quarter profit was $12.5 million, above analysts’ expectations of $12.3 million.
But for the year, the nation’s largest dealer of semi trucks had revenue of $4.2 billion, 16 percent lower than 2015’s $5 billion.
“New heavy-duty truck sales were off significantly in 2016, as several of our large fleet customers delayed purchases due to excess capacity, an erratic freight environment and low used truck trade-in valuations caused by an oversupply of used trucks,” Rush’s Chairman, Chief Executive Officer and President W.M. “Rusty” Rush said in a news release. “However, our solid performance in medium-duty new truck sales was a bright spot for the year.”
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Rush Enterprises’ share of the U.S. Class 8 truck market — which consists of tractor-trailer tractors and other heavy-duty trucks — fell to 5.5 percent in 2016 from 6.7 percent in 2015. Overall sales of Class 8 trucks were down nearly 36 percent in 2016 compared to 2015, the news release said.
“2016 was a tough year for heavy-duty truck sales across the industry, as U.S. Class 8 retail sales were down 22.2% compared to 2015,” Rush said in its news release. “Throughout 2016, significantly reduced demand from several large fleet customers negatively impacted our new Class 8 truck sales. We saw some moderate increases … particularly in Texas, California and Florida, but over-the-road truck sales were sluggish throughout 2016.”
Early in 2016, Rush said the company had “instituted extensive expense reductions to offset declining revenue” which included the closing of multiple Rush truck center locations.
“Additionally, we formed a Business Process Management group that has been tasked with improving efficiencies in the way we do business throughout the organization to enable us to increase productivity, decrease expenses and better ensure a consistent experience for both our customers and our employees,” Rush explained.
Rush took in fourth-quarter revenue of $1 billion, matching Wall Street estimates. Rush reported $1.2 billion in revenue in the fourth quarter of 2015 and earned $1.1 billion in revenue in the third quarter of 2016. It earned $14.9 million or 38 cents per share in the third quarter of 2016.
One bright spot Rush pointed to is growing activity in the energy sector. Oil prices stabilized above $50 a barrel in the fourth quarter of 2016 as the Organization of Petroleum Exporting Countries moved to cut production and prop up prices. Oil hit lows of $26 a barrel in February 2016 after plummeting from highs of $107 a barrel it hit in June 2014.
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“As we look ahead, we are beginning to see a slight increase in parts and service activity from the energy sector, notably an increase in our mobile services supporting energy customers,” Rush said.
Absent from the earnings was any mention of a legal battle between Rush’s Chairman, CEO and President W.M. “Rusty” Rush, 58, and his father and the company’s founder, 78-year-old W. Marvin Rush, over what the elder Rush is planning to do with his $38 million worth of company stock. The younger Rush has accused his father of reneging on a deal to give all of his publicly traded stock — 1.2 million Rush Enterprise shares in total — to his son.
Marvin Rush has said no such agreement exists and nothing prevents him from giving his shares to his third wife, Barbara, 57.
rdruzin@express-news.net
@druz_journo
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