Industry surging back

Quarterly financial reports are like a tertiary marketing vehicle for public companies. Usually, some good number or good result from somewhere in the operation can be placed at the top and trumpeted in the headline to let the world know how wonderfully well the company is doing.

As sources of information about the company, however, they leave much to be desired. A three-month span is not a long time. It represents a small enough slice of the company’s overall business that relatively insignificant events have a magnified effect on the numbers. Wow! A 50 per cent increase! Of course, generating eye-catching figures like this is the whole point.

A better way to generate at least a broad overview of companies’ performances is to look at the year-end numbers they report along with their fourth-quarter results. A year is long enough that trends can be spotted and minor anomalies, good or bad, do not have as much effect on the overall results. So, below, we have compiled the fiscal year 2011 results for revenues, year-over-year change in revenues and net income/loss for a number of major industry players.

This representation is simplistic, to be sure. It also compares apples to oranges in many places, because several companies have odd fiscal years. The intent is not to give a comprehensive picture of the companies’ performances, but to generate a general snapshot of how the sector is doing. Call it a Dow Jones Index of the rental industry. 

Based on the numbers on this chart, it is too bad we cannot buy funds that track this index. Public rental companies and construction equipment manufacturers had a banner year in 2011. Double-digit increases were the rule rather than the exception. Of course, many of these numbers are coming from a low place following the American recession of the last three years. So the picture here is not necessarily one of health and strength, but rather of robust recovery.