(Reuters) - Ashtead missed third-quarter pretax profit and revenue expectations on Tuesday, pressured by weakness in the U.S. construction sector, although the British equipment rental firm maintained
Ashtead's Profit Misses Expectations Amid U.S. Construction Slowdown
(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)
