Market slowdown impacts Custom Truck revenues

(Photo: KHL staff)

Custom Truck One Source has said that a slowdown in its core markets has seen rental revenue decrease by 8.4% for the third quarter of 2024.

Rental revenues from the utility equipment rental and sales specialist reached $108.3 million in the quarter, down from the $118.2 billion it posted in the same period in 2023.

However, total sales for the business did see a slight increase of 5% from the preceeding quarter, moving to $447.2 million at an increase of $24.2 million.

Revenue year on year also saw a modest increase of 3% when compared with Q3 2023.

According to Custom One, this was due to higher levels of new truck sales and equipment on rent. Meanwhile, the company said it is still seeing strong demand from from customers in infrastructure, rail, and telecom end-markets.

Ryan McMonagle, CEO, said, “However, this decline has proven to be temporary, and we observed significant improvements in the third quarter, which have continued into the fourth quarter. Through late October, OEC on rent has increased by over $200 million, or 20%, since the end of the second quarter.

“While a portion of this growth can be attributed to our customers’ recovery and restoration work associated with recent weather events, the majority stems from non-storm-related work in our core T&D and vocational end-markets. We are optimistic about fiscal 2025 and believe we are well-positioned to benefit from secular tailwinds driven by AI and data center investments, electrification, and utility grid upgrades.

Looking ahead, the company has reduced the top end of its outlook for full year rental revenues by $15 billion and full revenues by $75 million. It added that it “continues to believe the long-term outlook for growth in rental, used and new equipment sales demand remains strong across all of our end markets.”