Rush Enterprises Q3 Class 8 Sales Down 31.5%

Rush Enterprises, which operates the largest network of commercial vehicle dealerships in North America, reported Q3/16 revenues of $1.096 billion and net income of $14.9 million compared with revenues of $1.294 billion and net income of $19.6 million in Q3/15.

“A sluggish energy sector, choppy freight environment, excess Class 8 fleet vehicle capacity, and low used truck values continued to negatively impact our new and used Class 8 truck sales and parts and service revenues in the third quarter,” said W. M. “Rusty” Rush, chairman, president and CEO of Rush Enterprises. “We are seeing a positive impact from our broad-reaching expense reductions implemented earlier this year and will remain diligent in controlling expenses. We continue to invest in our strategic initiatives ranging from all-makes parts to vehicle technologies.”

U.S. Class 8 retail sales were 46,373 units in the third quarter, down 31% over the same time period last year, according to ACT Research. Rush’s Class 8 sales decreased 31.5% as compared to the Q3/15 and accounted for 6.5% of the U.S. Class 8 truck market. ACT Research forecasts U.S. retail sales for Class 8 vehicles to be 201,000 units in 2016, a 20.5% decrease compared to 2015.

“Our Class 8 new truck sales continue to be impacted by significantly reduced demand from several large fleet customers and from challenges in the Class 8 truck market,” Rush said. “We are seeing hesitation from customers due to a choppy freight environment and general economic uncertainty. That said, construction and refuse activity remains solid, and we are focused on gaining incremental sales from new customers despite tough market conditions. In the fourth quarter, we expect our new Class 8 truck sales to be down slightly compared to the third quarter,” Rush said.

Rush’s Class 4 through 7 medium-duty sales decreased 14.5% from Q3/15, accounting for 4.4% of the total U.S. market in Q3/16. U.S. Class 4 through 7 retail sales were 56,499 units in the third quarter, which was flat compared to Q3/15.

“Our medium-duty truck sales were down somewhat compared to the third quarter of 2015, but our overall medium-duty performance remains solid,” Rush said. “Construction is still a significant driver of medium-duty business, and we are seeing increased construction-related demand throughout the country, particularly in Texas and the Southeast. With the continued decline in Class 8 sales activity, the market for medium-duty sales has grown even more competitive. However, our ability to stock a variety of bodied-up medium-duty trucks continues to allow us to meet a wider range of our customers’ immediate needs.”

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