Rush Enterprises beats earnings estimates as heavy truck sales fall 20%

New Braunfels-based truck dealer Rush Enterprises (Nasdaq: RUSHA) beat earnings estimates for the first quarter, the company announced this week, though weakness persisted in one sector.

The company, which primarily sells new and used Class 4-8 trucks for brands like Peterbilt and International, posted earnings of 88 cents per share, outpacing analyst estimates of 77 cents per share. While top line figures were largely positive, Class 8 heavy duty truck sales were sluggish, with the company selling 3,494 units in the first quarter. That's a 20% decline from the same period last year.

In a press release, Rush CEO and Chairman Rusty Rush said Class 8 sales were down due to interest rates, the freight recession and the fact that producers of those trucks have caught up with recent demand.

The company said Class 8 sales would be weaker in the second half of 2024.

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Answering questions in this week's earnings call, Rush said he still believes that while the Class 8 market would see weakness this year, the EPA's impending emissions regulations on heavy duty trucks will spur a flurry of buying in 2025 and 2026 before the rules are implemented in 2027. He pointed to new rules governing emissions in California that went into effect at the beginning of the year as an example of what could happen nationwide.

"But the effects of it have not been seen because we're still delivering stuff that was bought in late '23 when everyone really accelerated their purchases," Rush said. "So you really won't see the real effect of that until you get into the last part of this year, I think. And as people see that, I think they're going to get really nervous around the rest of the country as to what these new EPA laws are going to mean from a cost perspective."

Rush said he expects the company to experience "single-digit" growth this year, given the company's diversification in market segments from medium-duty trucks, heavy-duty and aftermarket solutions.