A strong Gulf Coast economy and improvements nationally lifted Baton Rouge-based H&E Equipment Services Inc.’s third-quarter earnings to $14 million, or 40 cents per share, compared to $3.7 million, or 11 cents per share, a year ago.
H&E reported its earnings before the markets opened Friday. Then investors pushed shares to a record high. The price rose quickly, peaking at a record $29.12. H&E closed at $28.73, up nearly 15 percent. The increase pushed the company’s market capitalization, or the value of its shares, to $1 billion.
“Construction activity in the industrial areas we serve, particularly the oilpatch and petrochemical industry, is the highest we’ve seen since the last peak cycle,” H&E Chief Executive Officer John Engquist said during a Friday morning conference call with stock analysts and investors.
H&E saw revenues rise in every sector of the country, but the Gulf Coast region, which includes Louisiana and Texas, saw the largest revenue increase by far at 52 percent. H&E expects these positive trends to continue, Engquist said.
Over the next five years, Louisiana will see an unprecedented $90 billion in investments from national and international firms, he said. It’s part of an explosion in oilpatch, petrochemical and manufacturing spending along the Gulf Coast.
“We are well-positioned to capitalize on these activities,” Engquist said.
H&E’s 2012 results were hampered by a $10.2 million charge for early payment of debt. Without that charge, H&E’s adjusted profit would have been $10.9 million.
The company, which sells and rents construction equipment, saw third quarter revenue swell by 32.2 percent to $270.4 million thanks to increases in both segments.
H&E’s results easily outstripped the forecast by stock analysts surveyed by Thomson Reuters. Those analysts predicted earnings of 35 cents per share on revenue of $244.1 million.
Rental revenues grew by 14.9 percent, thanks to a larger fleet and higher prices. New equipment sales jumped 84.1 percent, driven by strong sales of crane and earthmoving equipment. Used equipment sales rose 47.2 percent, due to demand for aerial and earthmoving equipment. Aerial equipment includes hydraulic lifts that provide access to work areas high above the ground.