Ritchie Bros. Auctioneers Inc. (RBA), a Zacks #1 Rank (“strong buy”) company, announced another record-breaking quarter in early August. Adjusted earnings per share of 37 cents topped last year’s 25 cents and exceeded the consensus estimate by 19%.

Company Description

Ritchie Bros. is an auctioneer of industrial equipment primarily to the used construction, transportation, and agricultural equipment sectors worldwide. The company’s customers include contractors, truck and equipment dealers and brokers, finance companies, and rental companies. RBA has over 110 locations throughout North and South America, Europe, Asia, Australia, Africa and the Middle East. The company was founded in 1963 and is headquartered in Richmond, Canada.

Another Record Quarter

Ritchie Bros. announced another record-breaking quarter in early August. Adjusted earnings per share of 37 cents topped last year’s 25 cents and exceeded the consensus estimate by 19%.

CEO Peter Blake said that each year RBA has welcomed more bidders and more sellers from around the world to its auctions and that trend continued in the first six months of 2008. He added, “many of the markets and regions we serve are experiencing challenging economic times, yet our auctions were, on average, larger than ever before. We proudly conducted our first billion-dollar quarter in Q2 and set a number of new company records Incorporatedluding our highest auction revenues, net earnings and earnings per share for one quarter. We are very pleased with these results because they are evidence of our success to date in executing our ongoing growth strategy, which emphasizes continual reinvestment in our people, places and processes. In the past six months we continued to lay the foundation for sustainable long-term growth by hiring and training more qualified sales and support personnel.”

Higher Income from RBA

The company also declared a quarterly cash dividend of 9 cents per common share, which was paid out on September 12. The dividend was 13% higher RBA’s previous quarterly dividend. Its dividend yield of 1.7% is well above the industry average as the majority of RBA’s industry peers pay no dividend.

More Favorable Comparisons

Ritchie Bros. offers a return on equity (ROE) of 19%, which is higher than the industry average of 13%. Earnings per share are expected to grow by 17% over the next 3 – 5 years, versus the industry average of 15%.

Estimates Have Risen

Analysts are forecasting full-year 2008 earnings of 85 cents per share, up from expectations of two months ago, which stood at 81 cents.

Content Courtesy: Zacks Investment Research

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