Rental revenue fell at truck and van supplier Ryder System but increased at heavy equipment supplier Herc Rentals, according to the companies’ earnings reports. Rental utilization fell at both companies for the quarter ending Dec. 31.
Ryder’s rental revenue slides again
United Kingdom–based Ryder System’s commercial rental revenue for the fourth quarter of 2023 dropped 20% year over year to $279 million, according to today’s earnings release. Full-year rental revenue fell 12% to $1.2 billion when compared with 2022.
Ryder also posted a YoY decline in Q3 rental revenue.
Weaker freight volumes contributed to the decline during the quarter, according to the earnings presentations. Rental utilization of Ryder’s power units was flat quarter –over –quarter, at 75%, but down 8 percentage points YoY, according to the earnings release. .
“Throughout 2023, we maintained rental utilization at target levels by actively redeploying vehicles into longer-term lease, dedicated, and supply chain applications,” Chief Executive Robert Sanchez said.
Herc boosts rental revenue
Bonita Springs, Fla.-based Herc Rentals, meanwhile, posted YoY gains in equipment rental revenues in 2023.
Equipment rental revenue increased 12% YoY to $2.9 billion for the year, according to the earnings supplement. Rental revenue in Q4 increased 4.9% to $748 million, driven by a 9.4% YoY increase in rental volumes.
Dollar utilization, calculated by dividing rental revenue by the average equipment cost over the relevant period, was down 2.6 percentage points 40.9% in the fourth quarter, according to the earnings release. Dollar utilization was 40.8% for the year, a decrease of 2.5 percentage points.
A decrease in the studio entertainment business as a result of the strikes in Hollywood contributed to a 1.7 percentage point decrease in utilization rates, the company said. Herc is actively trying to sell its studio rental business, Cinelease, following the strikes in the entertainment industry last year.
The company expects a 7% to 10% increase in “organic rental-revenue” growth in 2024, President and Chief Executive Officer Lawrence Silber said.
Herc joins United Rentals in posting rental revenue growth for the quarter. United logged a 19.3% YoY increase in rental revenue in 2023 to $12.1 billion, according to the company’s Jan. 25 yearnings release.
Shares of Herc Holdings [NYSE: HRI] were trading at $143.37 per share as of market close Tuesday, up roughly 1.7% or $2.14 since market open. The company has a market cap of $4 billion.
Shares of Ryder System [NYSE: R] were trading at $111.00 per share as of market close Tuesday, down roughly 6.3% or $7.52 since market open. The company has a market cap of $4.9 billion.
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