Rush Enterprises Q3/17 Class 8 Truck Sales Outpace Industry
OCT 26, 2017 - 6:28 am
Rush Enterprises, which operates the largest network of commercial vehicle dealerships in North America, announced for Q3/17, the company achieved revenues of $1.257 billion and net income of $29.8 million compared with revenues of $1.096 billion and net income of $14.9 million in Q3/16.
“Continued broad-based strength in the U.S. economy and most of the customer segments we support helped us achieve record-high profitability in the third quarter,” said W.M. “Rusty” Rush, chairman, chief executive officer and president of Rush Enterprises. “Further, we continued to advance our strategic initiatives, particularly in the areas of all-makes parts and service, which also contributed to our strong performance this quarter.”
Aftermarket products and services accounted for approximately 62.9% of the company’s total gross profits in the third quarter, with parts, service and body shop revenues up 11.7% as compared to the same timeframe in 2016.
“The growth in our aftermarket revenues in the third quarter was driven by continued activity in the energy and construction sectors, as well as increasing activity from over-the-road fleet customers, and by the successful execution of certain strategic initiatives designed to increase aftermarket sales and gross profits,” Rush said. “Looking ahead, we expect customer demand for aftermarket products and services to remain solid, however, we expect our aftermarket revenues to be negatively impacted by the seasonal decline we typically experience during the fourth quarter.”
U.S. Class 8 retail sales were 51,574 units in the third quarter, up 11% over the same time period last year, according to ACT Research. Rush’s Class 8 sales outpaced the industry in the third quarter, increasing 20.6% as compared to Q3/16 and accounting for 7.1% of the U.S. Class 8 truck market.
ACT Research forecasts U.S. retail sales for Class 8 vehicles to be 190,000 units in 2017, a 3.5% decrease compared to 2016, but considerably higher than their original 2017 forecast of 154,000 units.
“The increase in our Class 8 new truck sales compared to the third quarter of 2016 is attributable in large part to increased activity from energy customers,” said Rush. “Additionally, vehicle sales activity remains solid in construction, refuse, general freight and the majority of the other industries we support around the country. We believe our Class 8 new truck sales in the fourth quarter will remain solid, due to this general economic strength,” he explained.
“Used truck valuations have stabilized, and we believe our used truck inventory is appropriately positioned to support current market dynamics and new truck sales,” Rush said.
Rush’s Class 4-7 medium-duty sales increased 14.5% from Q3/16, accounting for 4.6% of the total U.S. market. U.S. Class 4-7 retail sales were 61,538 units in Q3/17, up approximately 9.0% over Q3/16. ACT Research forecasts U.S. retail sales for Class 4-7 vehicles to reach 238,475 units in 2017, a 5.4% increase over 2016.
The company delivered 3,647 new heavy-duty trucks, 2,828 new medium-duty commercial vehicles, 447 new light-duty commercial vehicles and 1,743 used commercial vehicles during Q3/17, compared to 3,024 new heavy-duty trucks, 2,469 new medium-duty commercial vehicles, 523 new light-duty commercial vehicles and 1,795 used commercial vehicles during Q3/16.
“We had another strong quarter for our medium-duty truck sales, which were also positively impacted by continued strength in a wide variety of industries across the country,” said Rush. “Our continued ability to stock bodied-up medium-duty trucks allows us to meet our customers’ immediate needs. We expect our Class 4-7 new truck sales to also remain solid throughout the remainder of the year.”
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