Wrapping up Q4 earnings, we look at the numbers and key takeaways for the specialty equipment distributors stocks, including United Rentals (NYSE:URI) and its peers.
Historically, specialty equipment distributors have boasted deep selection and expertise in sometimes narrow areas like single-use packaging or unique lighting equipment. Additionally, the industry has evolved to include more automated industrial equipment and machinery over the last decade, driving efficiencies and enabling valuable data collection. Specialty equipment distributors whose offerings keep up with these trends can take share in a still-fragmented market, but like the broader industrials sector, this space is at the whim of economic cycles that impact the capital spending and manufacturing propelling industry volumes.
The 8 specialty equipment distributors stocks we track reported a slower Q4. As a group, revenues missed analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.3% since the latest earnings results.
Best Q4: United Rentals (NYSE:URI)
Owning the largest rental fleet in the world, United Rentals (NYSE:URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.
United Rentals reported revenues of $4.10 billion, up 9.8% year on year. This print exceeded analysts’ expectations by 3.9%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ organic revenue and adjusted operating income estimates.
Matthew Flannery, chief executive officer of United Rentals, said, “In 2024, we doubled-down on being the partner of choice for our customers and I am very pleased with our team’s success. Their commitment was critical to achieving the growth we delivered across this past year, which culminated in fourth-quarter records across revenue, EBITDA and earnings. Our unique value proposition, which includes prioritizing safety and productivity for our customers, supported our 2024 results and provides the foundation of our strategy to drive sustainable long-term value for our shareholders.”
United Rentals Total Revenue
United Rentals scored the biggest analyst estimates beat but had the weakest full-year guidance update of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 15.4% since reporting and currently trades at $641.60.
Known for distributing John Deere tractors and LESCO turf care products, SiteOne Landscape Supply (NYSE:SITE) provides landscaping products and services to professionals, including irrigation, lighting, and nursery supplies.
SiteOne reported revenues of $1.01 billion, up 5% year on year, outperforming analysts’ expectations by 1.3%. The business had a strong quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
SiteOne Total Revenue
Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 4.9% since reporting. It currently trades at $126.80.
Founded in 1947, Richardson Electronics (NASDAQ:RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products.
Richardson Electronics reported revenues of $49.49 million, up 12.1% year on year, falling short of analysts’ expectations by 3.5%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 19.4% since the results and currently trades at $11.86.
Formerly a subsidiary of Hertz Corporation and with a logo that still bears some similarities to its former parent, Herc Holdings (NYSE:HRI) provides equipment rental and related services to a wide range of industries.
Herc reported revenues of $951 million, up 14.4% year on year. This result beat analysts’ expectations by 2.5%. Zooming out, it was a mixed quarter as it also logged a solid beat of analysts’ adjusted operating income estimates but full-year EBITDA guidance missing analysts’ expectations significantly.
Herc pulled off the fastest revenue growth among its peers. The stock is down 32.7% since reporting and currently trades at $139.81.
Inspired by a family gas station, Custom Truck One Source (NYSE:CTOS) is a distributor of trucks and heavy equipment.
Custom Truck One Source reported revenues of $520.7 million, flat year on year. This print came in 3.7% below analysts' expectations. More broadly, it was actually a strong quarter as it recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
Custom Truck One Source achieved the highest full-year guidance raise among its peers. The stock is up 18.5% since reporting and currently trades at $4.74.
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