U-Haul Posts Q3 Loss as Fleet Depreciation Costs Surge

The company reported a loss available to common stockholders of $37 million, or 23 cents per share, marking a sharp reversal from the $67.2 million profit recorded during the same period last year. While revenue grew by 1.9% to reach $1.42 billion, the figure narrowly missed the $1.43 billion consensus estimate from analysts.

Operational Headwinds and Fleet Costs

The fiscal strain was largely attributed to a $74.6 million impact stemming from fleet depreciation and losses related to the disposal of retired rental equipment. Additionally, U-Haul faced a $37.9 million increase in liability costs during the quarter. Management linked the decline to a challenging secondary market for used vehicles, which has hampered the company’s ability to recoup value from its aging inventory.

Chief Executive Officer Joe Shoen noted that the company is currently managing underutilized capacity in both its vehicle fleet and self-storage units. Shoen indicated that U-Haul must better distinguish itself from self-storage competitors to drive top-line revenue growth and move past the current fiscal drag.

Despite the quarterly downturn, management expressed optimism regarding a potential stabilization in equipment values. "We continue to undermine earnings with fleet depreciation and poor resale results," Shoen stated in the report, adding that he expects the situation to bottom out during the current calendar year.