Ashtead Group plc ASHTY reported adjusted earnings of $1.16 per share in second-quarter fiscal 2025 (ended Oct. 31, 2024), which were 2% lower than the year-ago quarter. Increased operating costs and interest expenses offset gains of higher revenues, leading to the decline in ASHTY's earnings.
ASHTY’s earnings per American Depositary Receipt were $4.64, lower than $4.71 in the year-ago quarter. The metric missed the Zacks Consensus Estimate of $4.96 per share by a margin of 6.5%. Each Ashtead Group ADR represents four ordinary shares.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Ashtead Group Witnesses Higher Rental Revenues in Q2
The company reported net revenues of $2.94 billion, up 2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $2.97 billion.
Rental revenues increased 5% year over year to $2.72 billion . The sale of new equipment, merchandise and consumables declined 10% year over year to $90 million. The sale of used rental equipment plunged 35% to $126 million.
U.S. total revenues rose 1% year over year to $2.5 billion in the fiscal second quarter. Revenues in Canada increased 10.7% to $0.19 billion and U.K. revenues increased 7% to $0.24 billion.
U.S. rental-only revenues were 4% higher than a year ago. Canada’s rental-only revenues increased 20% while the UK saw a 4% increase in rental revenues.
ASHTY’s Q2 Operating Profit Declines
Total operating costs inched up 0.5% year over year to $1.53 billion. The adjusted operating profit dipped 0.6% year over year to $825 million. Adjusted operating margin contracted 80 basis points to 28.1% .
EBITDA was up 4% year over year to $1.41 billion due to higher depreciation and amortization. The EBITDA margin was 47.9%, an 80-basis point expansion from the prior-year quarter.
Ashtead Group’s Cash Position & Balance Sheet at Q2 End
The company reported cash and cash equivalents of $23.7 million as of Oct. 31, 2024, compared with $25.7 million as of Oct. 31, 2023. It generated $696 million in cash from operating activities in the first half of fiscal 2025 against a cash outflow of $30 million in the prior-year comparable period. Free cash flow for the first half of fiscal 2025 was $420 million compared with $355 million in the same period last fiscal.
ASHTY’s net debt was $10.95 billion at the end of the quarter, up from $10.6 billion at the end of the prior year quarter. Ashtead Group’s net debt to EBITDA ratio was 1.7X as of Oct. 31, 2024, compared with 1.8X as of Oct. 31, 2023.
The company announced a share buyback program of up to $1.5 billion over the next 18 months. In the first half of fiscal 2025, ASHTY spent $53 million on two bolt-on acquisitions and made capital expenditures worth $1.7 billion.
Ashtead Group’s rental fleet as of Oct. 31, 2024, represented a cost of $18 billion, with an average fleet age of 46 months.
ASHTY Lowers Outlook for Rental Revenues in FY25
Ashtead Group expects total rental revenues to rise in the band of 3-5% in fiscal 2025, lower than 5-8% expected earlier, reflecting local commercial construction market dynamics in the United States.
It now expects U.S. rental revenues to be up 2-4% compared with the previous expectation of 4-7% growth. Canada rental revenues are expected to be up 15-19% while U.K. rental revenue growth is expected to be in the band of 3-6%.
The capital expenditure for fiscal 2025 is expected to be in the range of $2.5 -$2.7 billion, lower than the earlier stated $3-$3.3 billion.
Ashtead Stock’s Price Performance & Zacks Rank
Ashtead Group's shares have gained 3.6% in the past year compared with the industry’s 12.6% growth.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ASHTY’s Industry Peers’ Earnings Performances
ScanSource SCSC reported first-quarter fiscal 2025 (ended Sept. 30, 2024) adjusted earnings per share of 84 cents , which beat the Zacks Consensus Estimate of 77 cents. Earnings improved 13.5% year over year. The improvement in earnings was attributed to a favorable revenue mix, decreased interest expenses and a lower share count.
SCSC witnessed an 11.5% decline in net sales to $776 million due to a weak demand environment. The figure also fell short of the consensus estimate of $799 million.
ClearSign Technologies Corporation CLIR reported an adjusted loss of 2 cents per share in third-quarter 2024, narrower than the Zacks Consensus Estimate of a loss of 3 cents per share. CLIR had incurred a loss of 3 cents per share in the year-ago quarter.
ClearSign Technologies registered revenues of $1.86 million compared with $0.09 million in the year-ago quarter. The top line beat the consensus estimate of $1 million.
Hillenbrand HI reported adjusted earnings per share of $1.01 in fourth-quarter fiscal 2024 (ended Sept. 30, 2024), which beat the Zacks Consensus Estimate of 93 cents. The bottom line declined 11% year over year due to cost inflation, lower volume and higher interest expense. This was partially offset by the Schenck Process Food and Performance Materials (“FPM”) acquisition, favorable pricing and savings from the previously announced restructuring.
Hillenbrand’s quarterly revenues rose 10% year over year to $838 million, attributed to the FPM acquisition. The top line beat the consensus estimate of $797 million.
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ScanSource, Inc. (SCSC) : Free Stock Analysis Report
Hillenbrand Inc (HI) : Free Stock Analysis Report
Ashtead Group PLC (ASHTY) : Free Stock Analysis Report
ClearSign Technologies Corporation (CLIR) : Free Stock Analysis Report
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