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Jun 30, 2023
H&E Equipment Q2 2023 Earnings Report
H&E Equipment Services reported strong financial results driven by rental revenue growth and improved gross margins.
Key Takeaways
H&E Equipment Services reported a strong second quarter with a 22.2% increase in revenue to $360.2 million and net income of $41.2 million. Rental revenues increased by 28.6%, and used equipment sales more than doubled. The company also updated its outlook for 2023, increasing gross capital expenditures and branch additions.
Revenues increased 22.2% to $360.2 million compared to $294.7 million.
Net income was $41.2 million compared to $27.9 million.
Total equipment rental revenues were $291.5 million, an increase of 28.1%.
Used equipment sales increased 110.6% to $39.7 million compared to $18.8 million.
H&E Equipment
H&E Equipment
H&E Equipment Revenue by Segment
Revenue by Segment
Equipment Rentals Revenue
CapyFin.comSales of New Equipment Revenue
CapyFin.com Forward Guidance
H&E Equipment Services raised its 2023 gross capital expenditures to a range of $600 million to $650 million, up from a previous range of $500 million to $550 million. Also, they have raised their anticipated 2023 branch additions to a range of 12 to 15 locations, up from 10 to 15 locations.
Positive Outlook
- Resilient nonresidential construction demand through May 2023 resulted in a 17% improvement in year-over-year customer spending growth.
- Healthy project backlogs remain in place and are expected to be sustained through 2023, with positive implications for 2024.
- An increase in the number of large-scale projects serves as a likely catalyst for further construction spending and expansion across the equipment rental industry.
- Construction of private and federally funded projects are active throughout H&E's geographic footprint and represent a growing component of their project mix.
- Strong industry fundamentals and the stimulus from major projects are expected to produce solid business opportunities through the balance of 2023 and into 2024.
Challenges Ahead
- Risks related to a global pandemic and similar health concerns.
- General economic conditions and construction and industrial activity in North America.
- Inability to obtain equipment and other supplies for business from key suppliers on acceptable terms.
- Increased maintenance and repair costs as fleet ages and decreases in equipment’s residual value.
- Compliance with laws and regulations, including those relating to environmental matters, corporate governance matters and tax matters, as well as any future changes to such laws and regulations.
Revenue & Expenses
Visualization of income flow from segment revenue to net income