Amerco (NASDAQ:UHAL) Q3 2019 Earnings Conference Call Transcript
Feb 07, 2019 • 10:00 am ET
Allison, we have a few questions that came in before the call from Jamie Wilen. I'll go ahead and ask those now. The first question is, in the moving and storage business, once we take out all the non-reoccurring items, what are operating profits this year versus this quarter last year? Have we been able to obtain any operating leverage on the 9% increase in revenue? Is the outlook for revenue growth to continue at or near this pace in the future?
Jason A. Berg
Sebastien, I'll take that. This is Jason. So operating earnings for the third quarter were $120 million, compared to $93 million, so we did see an improvement. Excluding the bump from the corporate account business or the last-mile business, we were closer to a 6% increase on equipment rental revenue for the quarter, which is closer to what we've been running this year. On our big three operating expenses, which are personnel, repair and liability costs, we are making improvement.
For personnel, I'd say that the third quarter, as a percent of revenues, stacked up favorably to third quarters that we've seen in the past. On a trailing 12-month basis, we're still probably about 150, 200 basis points off of our peak operating margin in fiscal '14 and '15. The new properties are continuing to put downward pressure on the margin in relation to where we were at the peak. But I feel like the effect of those is beginning to lessen. However, that development is going to be an obstacle for us getting back to where we were, at least for the next couple of years.
The second question we have is, we sold fewer rental trucks in the quarter but at higher prices. Would you expect to sell more in the fourth quarter and how is pricing in the used truck market currently?
Jason A. Berg
I'll start with this one. It's Jason again. The fourth quarter is typically our lightest quarter for truck sales. The fourth quarter of last year was a bit heavier than most. It was still the lightest of the four quarters last year, but I would not expect us to sell many more trucks than we did during the fourth quarter of last year.
In the self-storage business, when we take out locations that are less than three years old and still in the ramp-up stage, what are occupancy rates versus last year?
Jason A. Berg
So if I look at locations that were open more than three years, last year at this time, and I take that same group of properties, which is a little over 700 properties, and look at the occupancy this year, the average occupancy for those locations last year was about 82.5%. This year, just under 84%. And the median for those last year was 89.6%, and we're just under 91% this year. So on either measurement, our occupancy on that basis has improved close to 1.5 points.
We've added nearly 5 million net rentable square feet in the last year,