Shares of Mobile Mini Inc (NASDAQ:MINI) took a dive today after the equipment rental specialist reported second-quarter earnings. Though the overall numbers were better than expectations, the stock still fell for unexplained reasons, closing down 14.3%.
Revenue in the period increased 12.1% to $142 million as results were propelled by growth of 12.8% in rental revenue, which makes up more than 90% of total sales. Management called that growth "exceptional" as revenue beat estimates at $140.3 million.
Growth in the tank and pump solutions segment also impressed, increasing 21.2% to $27.1 million, and utilization rates were up in both storage solutions and tank and pump solutions.
On the bottom line, adjusted earnings per share increased from $0.24 to $0.35, in line with estimates. CEO Erik Olsson sounded optimistic about the future, saying, "The current performance and pipeline reinforces our outlook for revenue increases in excess of our evergreen model, leading to continued strong increases in adjusted EBITDA and healthy free cash flow generation."
Given the strong quarterly performance, the sell-off was puzzling. Management did not give specific guidance, but said they expected solid growth to continue, calling for double-digit revenue increases for the rest of the year
The market may have been disappointed that earnings did not exceed estimates, given the impressive revenue growth, or the stock may have been seen as overheated after gaining roughly 50% over the past year prior to today's report. Either way, there seems to be little for shareholders to worry about here in spite of the sell-off.