Rush Enterprises (NASDAQ: RUSHA) attributes its robust first quarter revenue to strong heavy-duty and medium-duty truck sales, solid gains in its aftermarket products and services and increased service offerings that included adding 85 technicians to its 100 dealerships in the U.S.
San Antonio-based Rush Enterprises is the country’s only publicly traded truck dealer, with more than 100 dealerships in 22 states.
The company reported strong first quarter 2019 revenues of nearly $1.34 billion on April 24, up 8.7 percent from $1.24 billion in the first quarter of 2018.
The company’s net income in the first quarter was $37.1 million, or $0.98 cents per diluted share, up 76.6 percent compared to net income of $21 million, or $0.51 per diluted share, in the first quarter of 2018. This exceeded analysts’ expectations of $0.88 per share for the first quarter of 2019.
The prior year’s first quarter results included an additional pre-tax charge to amortization expense of $10.2 million, or $0.19 per diluted share, associated with the replacement of certain components of Rush’s enterprise resource planning (ERP) software planning platform, Rush said in its first quarter earnings release.
Excluding the ERP platform expense, Rush’s adjusted net income for the first quarter of 2019 was $28.7 million, or $0.70 per diluted share, the company said.
While the company is expecting lower sales of Class 8 trucks in late 2019, Rush expects sales of its Class 4-7 medium-duty trucks will continue to accelerate throughout 2019.
“This would help partially offset any downturn in the Class 8 market later in the year,” said W.M. “Rusty” Rush, chairman and chief executive of Rush Enterprises, on a call with analysts and reporters on April 25.
Rush said he expected to sell a few hundred more trucks in the first quarter of 2019, but that his estimates “fell a little short” compared with the company’s record-setting fourth quarter sales.
Rush said he is closely watching freight rates, which remain flat, because it is a strong indicator of whether decision-makers will add trucks.
In the first three months of the year, Rush said he hasn’t seen a lot of Class 8 order cancellations, but that some potential buyers have decided not to add more trucks like they originally planned on doing 90 to 120 days ago.
“I think cancellations are pretty muted, but intakes are pretty muted, too,” Rush said.