August 2, 2012 / 6:13 PM / in 5 years

UPDATE 1-Ritchie Bros' results miss estimates, shares fall

* Second quarter adj $0.30 vs est. $0.36

* Adj auction revenue rate down at 9.38 pct

* Shares fall 13 pct to a 6-year low

Aug 2(Reuters) - Ritchie Bros Auctioneers Inc’s quarterly results missed analysts’ estimates as weak prices of used equipment and stiff competition weighed on its auction revenue rate, sending its shares down 13 percent to a six-year low.

Adjusted auction revenue rate for the company, which auctions industrial equipment, fell to 9.38 percent from 9.96 percent a year earlier. Auction revenue rate is auction revenue as a percentage of gross auction proceeds.

“If we exclude the impact of our (fee) structure, our second-quarter auction rate would be 9.38 percent, which is lower than we have experienced over the past few years,” Chief Financial Officer Rob McLeod said on a conference call.

As prices fall, auction revenue rate -- a key performance indicator -- starts to decline.

Auction revenue rose 11 percent to $127.2 million, but lagged analysts’ average expectation of $133.8 million, according to Thomson Reuters I/B/E/S.

The company, with a market value of C$2.19 billion, sells trucks and other equipment used in the construction, agricultural and mining industries.

Ritchie Bros, which auctions Caterpillar Inc, Komatsu Ltd, Manitowoc Co Inc and Liebherr trucks and cranes, has been warning of competition by dealers and other auctioneers in the used equipment market.

“The usual suspects that we are battling everyday have been out there chasing a lot or most of the deals that we are on,” President Rob Mackay said on the call.

Other companies offering similar services include IronPlanet, Great American Group, GoIndustry, Hilco Industrial, Alex Lyons & Son and Dubai’s World Wide Auctioneers.

“We have seen a slowing in the export of used equipment out of the U.S. vis-a-vis last year,” Mackay said.

Ritchie Bros, which began more than half a century ago as a family-run business in British Columbia, Canada, conducts auctions in North America, Europe, Asia and the Middle East.

On an adjusted basis, the company earned $32.5 million, or 30 cents per share, in the second quarter below analysts’ average expectation of 36 cents per share.

Gross auction proceeds rose 4 percent to $1.2 billion.

The company, which raised its quarterly dividend by 9 percent to 12.25 cents per share, said it still expects full-year gross auction proceeds of between $3.7 billion and $4.1 billion.

Shares of Vancouver, British Columbia-based Ritchie Bros were down 7 percent at C$19.15 on Thursday on the Toronto Stock Exchange.

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