Rush Enterprises Q3 2020 Earnings Report
Key Takeaways
Rush Enterprises reported a decrease in revenue to $1.18 billion and a decrease in net income to $33.9 million, or $0.60 per diluted share, compared to the third quarter of 2019. The company experienced improvements from the second quarter of 2020, driven by improved truck sales, and implemented cost management measures that improved profitability, resulting in an absorption ratio of 119.4%.
Revenues reached $1.18 billion, with a net income of $33.9 million.
Earnings per diluted share were $0.60.
The board declared a cash dividend of $0.14 per share of Class A and Class B common stock.
The absorption ratio was 119.4%.
Rush Enterprises
Rush Enterprises
Rush Enterprises Revenue by Segment
Forward Guidance
While many uncertainties remain, the company continues to expect that any economic recovery will be gradual. The company was encouraged by its third quarter results and remains cautiously optimistic that the worst is behind it. The company remains focused on navigating this difficult period and monitoring the pandemic and its effects on the economy, its industry, customers and employees.
Positive Outlook
- Increased consumer spending increased demand for transportation services.
- The company implemented rapid and widespread cost reduction measures.
- The balance sheet and cash position remain strong.
- The Board of Directors approved lifting the suspension of the previously announced stock repurchase program.
- The Board of Directors also approved cash dividend payments to stockholders that effectively increases the dividend amount by 50% over the prior quarterly dividend.
Challenges Ahead
- The ongoing COVID-19 pandemic and the previously anticipated industry downturn had a negative impact on the third quarter results.
- Many uncertainties about the pandemic and the economy in general remain.
- The pandemic will have a significant effect on the business for the foreseeable future.
- Activity from the energy market remains significantly lower than normal and is not expected to recover any time soon.
- The company expects some seasonal softness through the winter, which is normal for the business.