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What: McGrath RentCorp
So what: Revenue grew 20% and EPS grew 43% from the year-ago quarter, indicating the company is benefiting from operating leverage as the economy improves. Management guided 2011 EPS to $1.52 to $1.62, compared to the consensus estimate of $1.52.
Now what: Management's comments about the environment were mixed, citing improvements in demand and pricing and additional branches, salespeople, and rental equipment as positives and ongoing weakness in selected areas as challenges. The bias was on the positive side. Guidance calls for EPS growth of only 1% to 8% in 2011, another indication there is potential for more positive earnings surprises.
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