Alta Equipment sales rise, rentals fall in second quarter

Alta Equipment Group’s new and used equipment sales increased in the second quarter, while rental revenue and equipment sales fell as Alta continued to shrink its rental fleet.  

Bigger picture 

Strong demand for heavy earth-moving machines for infrastructure projects and in mining markets drove second-quarter growth despite trade policy uncertainty, regional volatility, interest rate pressures and strategic rental fleet reductions, Chief Executive Ryan Greenawalt said during Alta’s Aug. 7 earnings call. 

“Amid persistent uncertainty around trade policy, interest rates and broader macro sentiment, Alta delivered a strong second quarter, underscoring the resilience of our diversified model and the advantage created by disciplined operational execution,” he said.  

“Due to infrastructure projects, new and used equipment sales increased by $21.5 million, supported by strong demand in many key markets and improving customer sentiment in our Midwest and Canadian operations, particularly in aggregate and mining markets.” 

Alta’s rental fleet reduction and the sale of Chicago aerial assets, which were sold to an undisclosed buyer for $18 million on May 1,  cut its construction segment fleet size by nearly $60 million from last year, Greenwalt said. As a result, the company’s rental revenue declined, Chief Financial Officer Tony Colucci said during the earnings call.  

“Rental revenues are down $7.4 million year over year, largely related to our strategic decision to reduce the size of our rental fleet as we focus on better utilization and ultimately enhance returns on our investment in rental fleet,” he said.  

Alta trimmed its initial high-end guidance by $5 million to $181.5 million due to tariff impacts on its Ecoverse line, margin recovery risks in the second half of 2025 and weakness in product support and rentals, Colucci said. 

What they’re saying 

Despite the decline in revenue, B. Riley Securities maintained a buy estimate for Alta Equipment Group’s stock, as the company continues to focus on margin improvement, rental fleet optimization and building a less cyclical business amid macroeconomic headwinds, analyst Liam Burke said in a research note. 

Meanwhile, new and used sales margins in the construction equipment segment fell 120 basis points year over year to 11.7%. This was due to pressure from sluggish non-residential construction amid higher interest rates, slow dealer support from Volvo, and an oversupplied market driving price competition, Steven Ramsey, deputy director of research at Thomas Research Group, said in a research note. 

“Our channel checks have pointed to [non-residential construction numbers and slow Volvo dealer support] still being constraints through the end of Q2,” he said. “Volvo has made supportive moves this year, and we believe sales growth in each of Q1, up 0.5% YoY and Q2, up 14.8%, YoY shows this is bearing fruit.” 

By the numbers 

Livonia, Mich.-based Alta Equipment reported in its 10-Q filing with the SEC for Q2:  

• Total revenue fell 1.4% YoY to $481.2 million;  

• Total new and used equipment sales rose 5.6% YoY to $265.6 million; 

• Total rental revenue declined 13.8% YoY to $46.3 million; 

• Total rental equipment sales dropped 25.6% YoY to $28.8 million;  

• Material handling segment revenue totaled $160.7 million, down 8.5% YoY;  

• Material handling sales for new and used equipment landed at $81.9 million, down 9.2% YoY;  

• Material handling rental revenue was $17.5 million, down 12.5% YoY;  

• Construction segment revenue increased to $300.7 million, up 2% YoY;  

• New and used construction equipment sales rose to $167 million, up 14.8% YoY; 

• Construction rental revenue fell to $28.8 million, down 13.5% YoY; 

• Master distribution revenue was $20.9 million, up 25.1% YoY;  

• Master distribution new and used sales totaled $17.6 million, up 22.2% YoY;  

• Floor plan payables for new equipment totaled $260.9 million, down 12.6% YoY; and  

• Floor plan payables for used and rental equipment plummeted 31.2% YoY to $68.7 million.  

Noteworthy 

Alta expects the restored 100% bonus depreciation and expanded Section 179 limits to boost yearend heavy equipment demand, Colucci said.  

“Whenever we have some stability or regulation that impacts fiscal tax year, which, in this case, is 2025, not 2026, we usually see the impact right at the tail end of the year, and I am talking November and December,” he said. Yearend tax planning, particularly around bonus depreciation and Section 179, typically drives a Q4 boost, with the greatest impact in construction but also influencing material handling, he added. 

MARKET REACTION: Shares of Alta Equipment Group [NYSE: ALTG] were up 7.95% from market open to $7.74 as of market close today. It has a market capitalization of $243.62 million.  

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