By Ian Gilson, PhD, CFA
AMERCO (UHAL) announced its fourth quarter and full year results on June 05, 2013 and held a conference call on June 06, 2013. Results were better than expected, as shown below.
Revenue from the truck rental business was, as in prior quarters, driven by transaction growth. Pricing was consistent with those a year ago (discounts change seasonally as well as with shortages on a regional basis) and there was modest growth in net fleet additions. Our estimates for Moving & Storage were close to those reported.
U-Haul added 15 company owned rental locations, all at storage sites, and 900 net new dealer locations. This brings the dealer count up too 16,400.
The quality of trucks built by GM and Ford have improved over the past few years. This has had a positive impact on maintenance costs. However, in the 4Q13 maintenance cost did increase more than expected and this had an impact on operating margins.
Self storage sustained its high level of occupancy shown in prior two quarters.. Self storage pricing continues to improve as the occupancy rate effects discounting. Room count continues to increase.
Self storage revenue increased by $6.1 million Y/Y and was slightly higher that third quarter results despite a small decline in occupancy.
Revenue from Oxford Life declined Y/Y and was below our estimate.
Rep. West. results now represent the revenue and income generated from insuring U-Haul trucks (moves with transaction count) and self storage contents. This revenue should grow as more trucks and more storage units are rented.
Other revenue, net investment and interest income included $8 in a one-time gain from a maturing mortgage. Without this gain pretax income would have been very close to our estimate.
The fourth quarter is often a balancing quarter with projections, such as taxes, and actuals are reconciled. The tax rate in 4Q13 was 22.7% as compared to a more normal 37% and 30% a year ago.
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