(Reuters) -British equipment rental company Ashtead missed third-quarter pre-tax profit and revenue expectations on Tuesday, pressured by weakness in the U.S. construction sector, which had led to a profit warning last December.
Its shares fell 3.5% in early trading to their lowest since November 2023, underperforming the FTSE 100 index which was 0.4% lower.
Equipment rental companies like Ashtead have faced profit margin pressures as a slow recovery in U.S. commercial construction, high interest rates, and ongoing supply chain issues, offset strength in mega projects.
Still, the company maintained its full-year outlook, citing confidence in underlying demand and possible recovery from stabilising interest rates.
The U.S. administration’s push for American-made goods could also boost demand for heavy-duty equipment as companies shore up U.S. operations to avoid tariffs.
Ashtead operates under the Sunbelt Rentals brand to lease construction, industrial, general and speciality equipment. It is the second-largest equipment rental firm by market share in the United States, which makes up most of the company’s revenues and profits.
“We are in a position of strength, with the operational flexibility and financial capacity to take advantage of the ongoing structural growth opportunities we see for the business,” CEO Brendan Horgan said in a statement.
“The Board looks to the future with confidence.”
The company also plans to move its primary listing to the United States and form a new U.S. parent company, for which it will seek shareholder approval in June. Ashtead did not provide an update on those plans on Tuesday.
Its revenue for the three-month period ended January 31 was $2.57 billion, while adjusted pre-tax profit reached $443 million. This was below analysts’ consensus of $2.64 billion and $447 million, respectively, as compiled by the company.
Bigger rival United Rentals also missed in January analysts’ estimates for fourth-quarter profit, hit by inflationary costs.
(Reporting by Pushkala Aripaka in Bengaluru; Editing by Sherry Jacob-Phillips and Emelia Sithole-Matarise)
