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Dec 31, 2019
Rush Enterprises Q4 2019 Earnings Report
Reported strong financial results despite declines in new Class 8 truck sales and aftermarket products and services sales in Q4.
Key Takeaways
Rush Enterprises reported Q4 2019 revenues of $1.3 billion and net income of $23.8 million, or $0.64 per diluted share. While aftermarket product and services revenues remained relatively flat compared to the previous year, the company experienced declines in new Class 8 truck sales. The company's absorption ratio was 116.6% in the fourth quarter of 2019.
Q4 revenues totaled $1.3 billion.
Q4 net income was $23.8 million, or $0.64 per diluted share.
Aftermarket product and services revenues were $421.2 million.
The company’s absorption ratio was 116.6%.
Rush Enterprises
Rush Enterprises
Forward Guidance
Rush Enterprises anticipates relatively flat parts and service activity throughout the industry in 2020 compared to 2019 and expects medium-duty performance to be on pace with the market.
Positive Outlook
- Freight rates are expected to improve in the second half of the year.
- The housing sector is growing.
- The economy is healthy.
- Believes aftermarket demand from our energy sector customers has bottomed.
- Focused on gaining market share and believe we are positioned for modest aftermarket products and services revenues growth in 2020.
Challenges Ahead
- 2020 will be a challenging year for the new Class 8 truck market.
- Excess truck capacity in the market resulting from exceptionally high unit sales volumes over the past two years.
- Excess truck capacity has negatively impacted freight rates for our customers.
- Declining freight rates, coupled with the fact that this is an election year, generally results in our customers being more cautious with their purchase decisions.
- Employee benefits and payroll taxes will negatively impact expenses in the first quarter of 2020 compared to the fourth quarter of 2019