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Shares of Ritchie Bros Auctioneers, Inc. (NYSE: RBA), the world's largest seller of used heavy equipment via its location and online auctions, are tumbling 9% as of 3:20 p.m. EST after the company fell short of analysts' third-quarter profit estimates.
Ritchie Bros. revenue checked in at $141 million during the third quarter, a 9% increase over the prior year, topping analysts' estimates calling for $139.4 million. However, the 9% increase was largely driven by acquisitions, and on a like-for-like basis revenue was down 8.3%. Unfortunately, the top-line increase didn't filter down to the bottom line, as the heavy equipment auctioneer's adjusted profit of $0.09 per share fell short of analysts' estimates calling for $0.14 per share.
Said Ravi Saligram, CEO of Ritchie Bros., in a press release:
Our third quarter revenues declined on a like-for-like basis versus prior year, which is primarily related to the significant equipment supply shortage especially in the U.S., as dealers and end users continue to experience high equipment utilization rates. We faced a tough comparable quarter due to the massive Columbus auction last year as well as growing pains of sales force integration and execution, as our legacy RB and IP teams learn to sell each others' offerings.
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The kind of speed bump Ritchie Bros. hit in 2017 hasn't been uncommon for the stock over the past two decades.
Despite missing earnings estimates, management is capable of righting the ship and believes the combination of Ritchie Bros. and Iron Planet will deliver growth going forward as the two former competitors develop synergies, expand business internationally, and cross-sell more of the company's products and services.
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