Rush Enterprises announced its third quarter earnings report late last week.
For the quarter ended Sept. 30, 2024, the company achieved revenues of $1.896 billion and net income of $79.1 million, or $0.97 per diluted share, compared with revenues of $1.981 billion and net income of $80.3 million, or $0.96 per diluted share, in the quarter ended Sept. 30, 2023.
“As we have experienced for the last several quarters, the industry continues to struggle with low freight rates and high interest rates, resulting in continued weak demand for Class 8 trucks. Considering these ongoing challenges, we are pleased with our overall financial performance in the third quarter,” says W.M. “Rusty” Rush, chairman, president and CEO at Rush Enterprises. “Although sluggish industry conditions continue to negatively impact over-the-road-carriers, we saw positive results in the quarter with respect to our Class 8 vocational and public sector customers. In addition, demand from our medium-duty customers remained healthy throughout the quarter, enabling us to outperform the market.”
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Overall, the company reports it sold 3,604 new Class 8 trucks in the third quarter, a decrease of 16.7% compared to the third quarter of 2023, which accounted for 5.3% of the new U.S. Class 8 truck market and 1.6% of the new Canada Class 8 truck market. The company also sold 1,829 used commercial vehicles in the third quarter of 2024, a 1.8% increase compared to the third quarter of 2023.
“While the used truck market remains difficult, our used truck operations are executing well, managing inventory levels to market conditions while also making strong contributions to our earnings,” Rush says.
Aftermarket products and services accounted for approximately 61.5% of the company’s total gross profit in the third quarter of 2024, with parts, service and collision center revenues totaling $633.0 million, down 1.6% compared to the third quarter of 2023. The company states it achieved a quarterly absorption ratio of 132.6% in the third quarter of 2024, compared to 132.8% in the third quarter of 2023.
“In the aftermarket, we saw a slight improvement in our revenue compared to our second quarter results, particularly with respect to our service sales, which outperformed the market,” Rush says.
He adds, “Our aftermarket revenue was down slightly year-over-year, but as I previously noted, was up compared to our second quarter results Although the freight recession continues, we saw sequential growth in the third quarter with respect to our over-the-road and wholesale customers for the first time since 2023. In addition, the refuse and public sector market segments continue to be bright spots with respect to Class 8 aftermarket sales, while medium-duty aftermarket sales continue to be strong across all market segments.”
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Finally, the company reports lease and rental revenue decreased 0.4% in the third quarter of 2024 compared to the third quarter of 2023, primarily due to a slight decrease in rental utilization.
“Our leasing and rental revenues were basically flat year-over-year. However, we continue to add new vehicles to our fleet, which will translate to lower operating costs going forward. We anticipate that rental utilization rates will improve in the fourth quarter, and we expect to see moderate growth in our leasing and rental revenues as we move into 2025”, Rush says.
