Ritchie Bros. Auctioneers Q1 Profit Meets View, But Revenues Miss

(RTTNews) - Ritchie Bros. Auctioneers, Inc. (RBA, RBA.TO) reported Monday a profit for the quarter that grew three percent from last year, despite lower revenue rate, reflecting improved gross auction proceeds and foreign exchange gains. Earnings per share matched analysts' expectations, while quarterly revenues missed their estimates.

The company also noted that its board of directors is in an advanced stage of selecting a new CEO as Peter Blake had in October 2013 announced that he will step down from the position in May 2014. Blake has agreed to continue to advise the executive team to help in a smooth transition of responsibilities to the new CEO.

"We are generally pleased with our performance during the first quarter, despite the weather challenges our customers faced in certain markets. Gross auction proceeds grew marginally compared to the same quarter last year, but the effects of a more familiar revenue rate offset that GAP growth," Blake said in a statement.

The Burnaby, Canada-based world's largest industrial auctioneer reported net earnings was $14.52 million or $0.13 per share for the first quarter, higher than $14.05 million or $0.13 per share in the prior-year quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter declined 3 percent to $98.59 million from $102.06 million in the sane quarter last year, primarily as a result of lower revenue rate, and missed twelve Wall Street analysts' consensus estimate of $101.56 million.

Gross auction proceeds or "GAP" edged up 1 percent to $855.38 million from $845.35 million in the prior-year quarter, due in part to an increased volume of underwritten business.

Revenue rate, revenues as a percentage of GAP, during the quarter, declined 54 basis points to 11.53 percent from last year's 12.07 percent. However, the company said it was more in line with its historical average.

The company noted that revenue and revenue rate declined due to the performance of its underwritten business.

Underwritten business, which is comprised of guarantee and inventory contracts, represented 24 percent of GAP, compared to 20 percent in the prior-year quarter.

The company said it sold about $323 million of equipment, trucks and other assets to online buyers during the quarter, up 12 percent from last year.

During the quarter, the company said it conducted 35 unreserved industrial auctions in 11 countries throughout North America, Europe, the Middle East and Australia.

Further, the company declared a quarterly cash dividend of $0.13 per common share, payable on June 13, to shareholders of record on May 23, 2014.

"We are actively investing in our revenue producers as they will help drive our long-term growth, and we continue to allocate more resources to regions where we see opportunities to gain further market share," Blake added.

RBA closed Friday's regular trading session at $25.08, up $0.21 on a volume of 0.41 million shares.