Amerco reported Third quarter results - Analyst Blog

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Amerco ( UHAL ) reported Third quarter results

Ian Gilson, CFA

The moving and storage revenue was in line with our estimates:

  Zacks estimates   3Q12 actual 3Q11 actual
Self-moving rentals     $375        $375      $343
Self-storage           $35           $34        $31
Products and services      $42         $43    $42
Property management fees    $5        $5       $5

Operating expenses

(dollar millions)

$260          $270  $253

The relatively mild winter (so far) had a positive impact on transactions, which increased fleet utilization for both one-way and local rentals. Third quarter growth improved over the prior Y/Y comparisons and the trend has continued into the fourth quarter. The company intends to build rental trucks in-house (mostly for one-way transactions) as well as add in-town vehicles. E-Move continues to grow at close to 10%.

Oxford Life Insurance completed another reinsurance transaction in the third quarter. The purchase of a block of of whole life policies caused a net increase in premiums of $58.3 million. However, under current accounting rules the income from these policies is spread over a long period so there was little change in net income in the life insurance group.

RepWest Insurance Company made a non-cash charge to strengthen its reserves. The pretax charge was $48.25 million. The tax impact reduced this to $31.4 million or $1.61 a share.  RepWest is no longer in the workers' compensation insurance business but this is related to the long tail liabilities RepWest assumed from other carriers or wrote itself over a decade ago. This is an addition to reserves for assumed liabilities that are larger than anticipated due to inflation in medical costs and other factors. This charge does not affect the core U-Haul businesses. We are treating this charge as a one-time event.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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