Amerco (NASDAQ:UHAL) reported its fiscal second-quarter 2018 earnings after the market closed on Wednesday. The parent company of the do-it-yourself moving leader and growing self-storage player U-Haul, which also has two insurance company subsidiaries, grew revenue 4.4%, while adjusted earnings per share (EPS) dropped 23% from the year-ago quarter. 

Shares of Amerco declined 2.2% on the next trading day, likely reflecting disappointment about the magnitude of the earnings loss. 

Amerco earnings: The raw numbers


Fiscal Q2 2018

Fiscal Q2 2017

Year-Over-Year Change


$1,042.7 million

$998.7 million


Operating income

$229.4 million

$307.0 million


Net income

$124.6 million $176.5 million (29%) 

GAAP earnings per share (EPS)




Adjusted EPS




Data source: Amerco. GAAP = generally accepted accounting principles.

The adjusted EPS comparison is the one to consider. It strips out the year-ago quarter's after-tax benefit of $0.79 per share associated with the company's settlement of its PODS Enterprises (PEI) trademark infringement litigation.

While year-over-year revenue grew, a rise in operating expenses resulted in operating income declining, which flowed through to the bottom line. Personnel and fleet maintenance and repair costs increased $46.6 million in the quarter compared with the year-ago period. The increase in personnel expense was largely driven by the payment of $20 million in discretionary bonuses to local field management. Higher costs associated with vehicles was due to the larger rental fleet combined with increased repairs on units being prepped for sale.

A young woman and man carrying boxes with a truck full of boxes and a house behind them.

Image source: Getty Images.

What happened with Amerco in the quarter?

  • Revenue in the U-Haul segment, which accounted for more than 92% of total revenue, increased 4.9% from the year-ago period to $965.2 million.
  • Revenue in the insurance segment (consisting of one property-casualty and one life-insurance company) was essentially flat at $79.6 million. (Revenue from the two segments adds up to slightly more than the company's total revenue because there's a small revenue elimination, which eliminates the sale of goods and services between the two business units.)
  • Within the U-Haul segment, DIY-moving equipment rental revenue grew 4.1% from the year-ago period to $740.6 million. Growth was driven by increases in both one-way and in-town transactions. The company increased its rental fleet size, number of independent dealers, and number of company-owned locations compared with the year-ago quarter.
  • Within the U-Haul segment, self-storage revenue jumped 11.5% to $80.5 million. Revenue growth was due to a combination of improved occupancy at existing locations plus the addition of new facilities.
  • Room count grew to 341,000 at the end of the quarter, compared with 294,000 at the end of the year-ago period.
  • Average occupancy rate based on room count was 73.9%, down from 78.9% in the year-ago period. This marks the eighth consecutive quarter of year-over-year declines in the occupancy rate. Positively, however, it's up again sequentially, as it was 73% last quarter and 72.1% the quarter before.
  • DIY-moving and self-storage product and service sales revenue increased 4.2% to $73.3 million, while property management fees grew 1.8% to $6.8 million. These are fees the company collects from managing self-storage units owned by others.
  • Operating income in the U-Haul segment dropped 26% to $216.9 million.
  • Operating income in the insurance segment declined 9.8% to $12.8 million.

What management had to say

Here's what CEO Joe Shoen had to say in the press release:

Quarterly results were impacted by $20 million of discretionary bonuses to frontline managers. Operating results were reduced by fewer trucks sold and a higher cost associated with those sold trucks. Truck sales will take at least six months to get back onto a more regular fleet rotation. Self-move and self-store transactions were within planned ranges. The closing of the Chelsea, NYC property sale occurred in October instead of September. 

Looking ahead

Amerco had another challenging quarter, with operating income declining 25% and adjusted EPS dropping 23% from the year-ago period. However, there were bright spots: Self-storage revenue grew 11.5%, and the average occupancy rate based on room count in the self-storage business continued to tick up sequentially. 

Amerco doesn't provide guidance. And there's just a single Wall Street analyst who provides estimates, making them of little value.