H&E Equipment Services showed strong recovery of its net income for the quarter with a $9.8m increase to $2.7m from a loss of $7.1m last year. For the first half of 2011 H&E reduced its net income losses more than five-fold, down to $3.78m from $19.17m in the same period of 2010.

Improved sales of new cranes and earthmoving equipment bolstered the figures with an increase from $28.96m last year to $57.91m for Q2 2011.

A 33.8% year on year increase in rental revenues for the quarter was also evident, jumping from $41.68m to $55.8m, which the firm attributes to better rental rates, a larger fleet and improved utilisation rates up to 25.8% for the quarter.

The company also performs remanufacture and repair work for Manitowoc cranes under the EnCore Partners programme at its Birmingham Alabama and Salt Lake City depots, which helped achieve positive growth of sales and revenues from parts and servicing operations to the tune of $2.16m and $672,000 respectively.

H&E Equipment Services president and CEO, John Engquist, said: “With 41% revenue growth on a year-over-year basis and 37% on a sequential basis, the current trends in our business are particularly encouraging despite a commercial construction environment that remains relatively dormant.

“The momentum in our rental business continued as revenue climbed 33.8%, gross profit increased 75.3%, and gross margins grew to 40.7% compared to 31.1% a year ago. We were pleased with the progress that we made on rental rates during the quarter. Rental rates increased 6.4% from a year ago and 4.2% from the first quarter.

Commenting on the timing of new equipment sales orders being processed, Engquist says the firm expects this quarter could be the strongest performance of the year for the firm.

“Our new equipment sales were particularly strong in the second quarter as strong demand for cranes and earthmoving machines resulted in a 100.0%, or $29m, revenue increase from a year ago.

“As a result of significant revenue growth in all of our operating segments, gross profit increased 47.6%, EBITDA grew 89.1% and we achieved bottom line profitability with EPS improving $0.28 from a year ago.”

He also added a note of caution, and commented, “While we expect continued sequential and year over year improvement in our rental business through the third quarter, we are more cautious and have less visibility on the distribution side of our business.”