H&E: Rental industry indicators point to transition

H&E Equipment Services’ 2024 Q1 results showed the company’s total revenues for the three months ending March 31 were $371.4 million, an increase of 15.2 percent compared to $322.5 million in the first quarter of 2023. Total equipment rental revenues increased to $295.3 million compared to $262 million in the first quarter of 2023, a 12.7 percent increase. Rental revenue for the company was $261.7 million compared to $232.1 million a year ago.

H&E Equipment Services (Photo: H&E Equipment Services)

The company also announced it grew its branch footprint by 17 percent, which included 15 locations resulting from our accelerated branch expansion program and five other locations added through acquisitions. 

Sales of rental equipment were up 49.8 percent to $48.1 million compared to $32.1 million a year ago, and new equipment sales amounted to $10.4 million compared to $7.8 million in 2023. The company also noted its rental fleet closed the first quarter with an original equipment cost (OEC) in excess of $2.8 billion, or 15.7 percent larger than its OEC on March 31, 2023.

Despite the positivity, however, H&E reduced its 2024 guidance for its capex spend, noting it now expects to spend $350 to $400 million on new fleet, down from its original guidance of $450 to $500 million, noting market shifts as a factor. 

Market conditions impacting future business

Brad Barber, chief executive officer of H&E stated, “We have reduced our 2024 guidance for gross fleet investment, with the steadying of industry fundamentals justifying a more balanced approach to capital spending over the year... With the availability of equipment from manufacturers returning to normal, we could quickly increase our spending range should industry demand accelerate. The revised spending range will adequately address the planned growth in 2024 across our branch network, which remains at 12 to 15 new locations.

“Our current outlook for the equipment rental industry indicates a transitioning business environment, with moderating growth levels compared to the exceptional rate of growth in construction spending and strong business dynamics experienced over the past 24 months. We believe the easing in the progression of construction spending is in part the result of a ‘higher for longer’ interest rate environment and generally tighter lending standards, which have contributed to a greater supply of rental equipment. Even though non-residential and industrial project backlogs remain solid, the rate of new project starts has slowed in early 2024.

“We note several factors that are expected to be instrumental in maintaining, or possibly improving upon an environment currently exhibiting moderate growth and steady industry fundamentals. These factors include the continued escalation of mega projects, an expected increase in infrastructure projects, favorable trends in rental penetration and the steady growth in construction employment. These critical factors reinforce non-residential construction and industrial project activity and serve as the foundation in support of elevated long-term industry growth.”


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Ollie Hodges Publisher Tel: +44 (0)1892 786253 E-mail: [email protected]
Lewis Tyler
Lewis Tyler Editor Tel: 44 (0)1892 786285 E-mail: [email protected]