Electro Rent sales hold steady, but worries lurk
Electro Rent's revenue holds steady, but worries over defense spending cutbacks, economy
VAN NUYS, Calif. (AP) -- Electro Rent Corp., which rents and sells computers and other electronic equipment, said Monday that revenue for the fiscal first quarter held steady but net income plunged largely because last year's results included gains from buying another company.
Electro Rent said "general economic uncertainty" affects its customers, which are largely companies in aerospace, defense, electronics, industrial and similar fields. The company was also hurt by the federal government's tightening its defense budget. Rental revenue rose while equipment sales fell.
For the fiscal first quarter, which covered June through August, Electro Rent reported net income of $5.1 million, or 21 cents per share, down from $8.5 million, or 35 cents per share, a year ago The year-ago results included a $3.2 million gain after buying a competitor, Equipment Management Technology.
Revenue edged down to $58.5 million from $58.7 million a year ago. Revenue from renting out equipment rose, while revenue from selling new equipment fell.
The stock fell 22 cents, of 1.3 percent, to $17.30 in morning trading Monday. Its shares have fallen 11 percent from a 52-week high of $19.35 in late March. They traded as low as $13.51 per share in late May.
