Herc Holdings Inc. (HRI) delivered mixed results in its third-quarter earnings report on Tuesday, exceeding revenue expectations but falling short on adjusted earnings per share. Despite the earnings miss, the company’s strong revenue performance and positive outlook propelled its stock price upwards by 8.3%.
The company reported adjusted earnings per share of $4.35, slightly missing analyst estimates of $4.48, according to Benzinga Pro. However, revenue came in at $965 million, surpassing the forecasted $931.31 million. This strong revenue performance was driven by a 6% year-over-year increase in total revenue, with equipment rental revenue reaching a quarterly record of $866 million, a 13% jump.
Herc Holdings’ impressive performance was also reflected in its profitability metrics. Adjusted EBITDA for the quarter rose 9% to $446 million, representing a 46.2% margin. Net income increased by 8% year-over-year to $122 million.
“In the third quarter, we significantly outpaced overall industry growth on both a total rental revenue basis and from an organic revenue perspective,” said Larry Silber, president and CEO of Herc Holdings. “By capitalizing on our broad end-market coverage, diversified product and services offering and expanding share in resilient urban markets, we continue to deliver strong volume and a solid price/mix performance.”
The company’s rental pricing increased by 2.3% year-over-year, while equipment rental volume grew by 10.7%. Herc also saw its dollar utilization improve to 42.2% compared to 42.1% in the prior year’s quarter.
Based on its strong performance, Herc Holdings raised its equipment rental revenue growth outlook from a range of 7% to 10% to a new range of 9.5% to 11%. The company also reaffirmed full-year adjusted EBITDA guidance of $1.55 billion to $1.6 billion.
The positive news sent HRI stock soaring, reaching $183.11 at the time of writing, according to Benzinga Pro. This strong performance suggests that Herc Holdings is well-positioned to continue its growth trajectory in the coming quarters.