[Stay on top of transportation news: Get TTNews in your inbox.]
Commercial vehicle dealership Rush Enterprises Inc. reported declines in fourth-quarter net income and revenue amid a falloff in Class 8 sales, but on an annual basis, achieved record revenue of nearly $6 billion plus increased profits.
For the quarter ended Dec. 31, net income fell to $23.7 million, or 64 cents per diluted share, as revenue dropped to $1.31 billion. That compared with net income of $46.9 million, or $1.20, on revenue of $1.54 billion in the same quarter a year ago.
“Though we experienced declines in new Class 8 truck sales and aftermarket products and services sales in the fourth quarter, our overall performance for the full year 2019 was strong, primarily due to a healthy economy and activity throughout the markets we support,” said W.M. “Rusty” Rush, chairman and CEO of Rush Enterprises Inc.
In the quarter, Class 8 sales generated $444.4 million in revenue, down from $672.6 million in the 2018 period.
Conversely, medium-duty sales, including buses, generated $279.3 million in revenue compared with $262.7 million a year earlier.
Used vehicle revenue in the quarter fell to $76.9 million compared with 488.6 million a year earlier.
“In addition, the successful execution of our strategic initiatives continues to contribute to our parts and service revenue growth, and we gained market share in our new medium-duty truck sales,” Rush said.
In the quarter, aftermarket product and services revenue inched higher to $421.2 million compared with $420.0 million in the fourth quarter of 2018.
“Despite our strong aftermarket products and services sales growth for the full year 2019, activity from our energy customers declined throughout 2019, negatively impacting our aftermarket products and services results, particularly in the fourth quarter. Widespread weakness in aftermarket demand, typical seasonal decline and the timing of the midweek holidays further impacted our fourth-quarter results,” he added.
In part two of a two-part exploration of autonomous technology today, our latest RoadSigns podcast revisits conversations with Chuck Price of TuSimple and Ognen Stojanovski of Pronto.ai. Hear them discuss a palatable Level 2 version of trucking autonomy. Listen to a snippet above, and to hear the full episode, go to RoadSigns.TTNews.com.
Rush sold 2,991 new heavy-duty trucks, 3,424 new medium-duty commercial vehicles, 436 new light-duty commercial vehicles and 1,932 used commercial vehicles during the fourth quarter. That compared with 4,811 new heavy-duty trucks, 3,421 new medium-duty commercial vehicles, 487 new light-duty commercial vehicles and 1,895 used commercial vehicles during the 2018 period.
For the full year, net income reached $141.5 million, or $3.77, on record revenue of $5.8 billion. That compared with net income of $139 million, or $3.45, on revenue of $5.5 billion a year earlier.
Rush sold 14,986 new Class 8 trucks in 2019, an increase of 2.2% compared with 2018, and accounted for 5.3% of the new U.S. Class 8 truck market.
The company sold 14,470 new medium-duty (Classes 4-7) commercial vehicles in 2019, an increase of 11.7% compared with 2018, accounting for 5.4% of the total U.S. market. Industrywide, new U.S. Classes 4-7 medium-duty commercial vehicle sales were 266,977 units in 2019, up 3.4% over 2018.
The company sold 7,741 used vehicles in 2019, a 3.5% decrease compared with 2018.
“Record new truck deliveries in the past few years caused an oversupply of used trucks in the market in 2019, which put pressure on used truck values in the second half of the year,” said Rush. “Currently, we believe that used truck values continue to depreciate significantly faster than what is considered a normal rate.”
Aftermarket products and services accounted for 64.9% of the company’s total gross profits in 2019, with parts, service and collision center revenues reaching $1.8 billion, up 5.5% compared with 2018.
The company owns and operates 100 dealership locations in 22 states. It sells Peterbilt, International, Hino, Isuzu, Ford, Fuso, IC Bus and Blue Bird vehicles.
Want more news? Listen to today's daily briefing: