A record quarter for AMERCO (UHAL) (UHAL)

A record quarter for AMERCO (UHAL)

Ian Gilson, CFA

On November 2, 2011 AMERCO (UHAL) announced its 2012 second fiscal quarter results, followed by a conference call on November 3, 2011.

Revenue from the moving and storage operations were well above our expectations:

	1Q actual	2Q actual	2Q est.
(Dollars in millions)
Self-moving equipment	$446.5	$511.6	$490.0
Products and services	$64.4	$59.8	$57.0
Self storage	$31.8	$34.0	$34.0
Self storage management fees	$4.7	$4.8	$5.0
Total moving and storage	$542.6	$605.4	$581.0
(excluding interest & investment income)
Operating expenses	$272.0	$294.3	$280.0
Pretax earnings	$125.7	$161.5	$147.8
Net for Common	$75.1	$101.2	$93.1

During the second quarter the truck rental operations achieved transaction growth of about 7%, with about 3% due to an increase in truck count, and revenue per transaction up about 2.5% year over year. Fleet utilization grew in the second quarter, but again seasonality had a major effect. Rental rates are competitive but are not as cutthroat as in prior years. H-Haul spent $285 million, including $28 million on new storage facilities and realized $110 million in used truck sales (at a profit). Both the local and point-to-point markets grew at the same rate in the second quarter, as they did in the first.

Truck rentals continue to grow in the third quarter but the company expects some expense growth as compared to a year ago. Truck acquisitions will be biased towards purchase rather than leasing, leading to an increase in depreciation with a reduction in leasing expense.

The self storage industry is growing slowly and the occupancy rate has increased. The company is adding rooms in certain areas and will continue to do so during fiscal 2012.

The U-Box venture is growing and all company owned stores are involved. Many of the company locations have self storage, truck rental and now U-Box storage.

AMERCO has started an Investment Club, whereby people can purchase asset backed investments. These are securities registered with the SEC and currently offer competitive rates with CDs. You can purchase the rear right wheel of a truck if you want to. The moneys will be cash on the asset side and notes & loans on the liabilities side. The return to the investor will be treated as an interest expense to AMERCO. On August 31, 2011the company raised $3.6 million for the Investors Club.

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