U-Haul Profit Climbs To $136.7 Million As Truck-Sale Losses Shrink, Chairman Calls It A 'Modest Win'
Smaller losses on retired trucks lifted second-quarter earnings, while freight and payroll costs rose and same-store storage occupancy slipped.
U-Haul Holding, which rents trucks, trailers and self-storage to people moving their own belongings, said second-quarter earnings available to common stockholders rose to $136.7 million from $105.6 million a year earlier. The gain leaned on far smaller losses from selling off retired rental equipment, even as freight, payroll and other costs climbed.
Cheaper truck disposals do the heavy lifting
Earnings per share for the non-voting UHAL.B stock were $0.71 for the quarter ended September 30, against $0.54 a year earlier. For the first six months, net earnings were $259.6 million versus $247.9 million, and UHAL.B earnings per share were $1.34 versus $1.27.
Net losses from disposing of retired rental equipment fell $34.1 million to $4.2 million, and fleet depreciation expense dropped $4.5 million. Together they helped lift Moving and Storage operating earnings $44.5 million to $241.9 million.
Adjusted EBITDA for that segment rose only $5.0 million to $547.6 million. On a trailing-twelve-month basis it fell $39.5 million to $1,642.4 million.
"I am going to call our results a modest win," said Joe Shoen, chairman of U-Haul Holding. "We continue to reinvest, but at an appropriately slower pace."
Costs climb, storage occupancy slips
The largest operating expense increases were freight and shipping, up $24.4 million, personnel, up $10.2 million, self-insured liability, up $6.2 million, and property taxes, up $4.7 million.
Self-moving equipment rental revenue rose $37.4 million, or 3.4%, with In-Town transactions up from a year earlier. Self-storage revenue rose $15.8 million, or 6.4%, and revenue per foot rose 6.7%, but same-store occupancy slipped 1.1% to 89.5%. Other Moving and Storage revenue rose $7.6 million, or 4.3%, on growth in the U-Box container product.
The company added 10 storage locations in the quarter and has about 11.4 million rentable square feet in development or pending.
Buybacks and a thinner liquidity cushion
Cash and credit availability at the Moving and Storage segment stood at $1,335.1 million on September 30, down from $1,479.4 million at March 31. In the quarter, U-Haul repurchased 1,095,478 non-voting shares for $68.2 million and 149,927 voting shares for $10.1 million.
The company declared a $0.05 per share dividend on the non-voting stock in August, paid on September 25. U-Haul holds its investor call Thursday at 10 a.m. Eastern, broadcast live at investors.uhaul.com.
Management gets its first chance to explain the quarter on Thursday's 10 a.m. Eastern investor call.
