Baton Rouge’s largest heavy equipment dealer, H&E Equipment Services, reports this morning that its profit increased by 25% last year to $55.1 million, up from $44.1 million in 2013. The increase was bolstered by a strong fourth-quarter, during which H&E reports its profit was $16.7 million, up 14% over the $14.6 million posted for the final three months of 2013.
“The fourth quarter represented a strong conclusion to a banner year for our company as we continued to successfully capitalize on the accelerating recovery in commercial construction markets,” CEO John Engquist says in the company’s earnings report. “Our rental business is performing extremely well, with revenues increasing 22.6% in the fourth quarter compared to last year, as we continue to experience solid demand in all of our end user markets.”
According to Business Report’s 2015 listing of the area’s largest heavy equipment dealers, based on total number of local staff, H&E is the largest, with 287 employees in Baton Rouge and 485 statewide. The company has 70 offices and service facilities across the country, specializing in new and used equipment sales, rental, parts sales and services operations.
H&E total revenue increased by 10.4%, or $102.7 million, to $1.1 billion in 2014, from $987.8 million in 2013. Equipment rental revenue increased 19.2% to $404.1 million, while new equipment sales increased 11.3% to $328 million. Used equipment sales decreased by 13% to $123.2, while parts sales increased 10.2% to $113.7 million and services revenue increased 8.1% to $61.3 million.
“We believe healthy growth opportunities will continue into 2015, driven by momentum in the non-residential construction markets and increasing industrial expansion in Louisiana and Texas,” Engquist concludes in the report. “While there is concern that reduced oil prices may negatively impact the anticipated expansion in Louisiana and Texas, many projects are expected to continue as a result of low natural gas prices. In addition, oil and gas activities only accounted for approximately 13% of our total revenues in 2014, with the vast majority of our equipment being used in oil production rather than exploration, which historically has been less sensitive to changes in the price of oil. Finally, we believe any adverse impact from decreased oil patch activity may be mitigated by increased activity in other industries as a result of lower fuel prices.”
H&E stock (ticker: HEES) was up sharply early today on the earnings report, but well short of its 52-week high. Over the past 12 months the stock has traded from $17.40 to $42.38 a share. See the complete H&E fourth-quarter report.
—Steve Sanoski
