“We continue to see positive rate increases on rough terrain cranes, but these increases were offset by rates on new rental contracts for boom trucks,” said John Engquist, president and chief executive officer of H&E Equipment Services, in a second-quarter earnings conference call with investor analysts.
He explained later in the press conference: “The pressure we’re seeing there is in boom trucks, and that’s because the drivers of the boom truck business are residential markets and commercial construction markets. The drivers of our other crane business is the industrial sector.”
“Increased construction costs such as steel, asphalt, plastic, wallboard, and fuel have presented new challenges to the construction markets,” Engquist said. “|n particular, the Florida, Southern California, and Mid-Atlantic regions remain very challenging. We are, however, pleased with the progress we’re making in our operations in the Mid-Atlantic region. We continue to develop their rental operations and transition them to our integrated business model, and we are confident they will become a strong contributor to our performance.”
Despite the small drop, Engquist said that the company has no plans to sell off some of its rental fleet: “Obviously, we won’t be de-fleeting in cranes. If anything, subject to availability we’ll grow our crane fleet somewhat, but we will be significantly reducing our capital spending on our aerial fleet and earthmoving fleets.”
He also said that sales for new cranes increased, raising the company’s equipment sales grew 27.4% in the period.
