What happened
U-Haul Holding (NYSE: UHAL) missed Wall Street expectations on earnings, and the company reported sluggishness throughout its business. Investors packed up and left, sending shares of the truck rental and self-storage company down about 18% for the week, according to data provided by S&P Global Market Intelligence, as of Thursday afternoon.
So what
U-Haul does best when America is on the move, and the slowdown in housing has apparently taken its toll on the company's results. On Wednesday, U-Haul reported earnings of $0.16 for its fiscal fourth quarter ending March 31, missing estimates by $0.38.
Revenue came in at $1.19 billion, slightly below expectations and down from $1.123 billion for the same period a year ago. Management said the business is normalizing after an impressive few years of gains.
"Overall moving activity has returned to more historic trends," CEO Joe Shoen said in a statement. "Self-storage is not as hot as 24 months ago, but we are still building and filling new units."
Self-moving remains the bigger part of the business, generating $726 million in sales in the quarter.
Now what
U-Haul said it expects capital expenditures for the rental fleet to increase in the new fiscal year, assuming it can get its hands on new trucks and other equipment. And Shoen stressed the company was going to focus on things it can control, including its competitive position and customer service, while the market adjusts.
Shares of U-Haul had nearly doubled over the past five years heading into this earnings report, but the company is at least somewhat exposed to a fall-off in demand.
U-Haul is an established company that fills an important need, and it is set up well to be a long-term winner. But investors are having a hard time figuring out how the company can accelerate into the fast lane for the time being.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool recommends U-Haul. The Motley Fool has a disclosure policy.
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