Electro Rent Corp. said Thursday that profits had fallen in its third quarter as the economic downturn had slowed the rental, lease, and sales of its electronic equipment and forced the company to cut prices.
The Van Nuys company, which specializes in personal computers, servers and electronic test equipment, reported net income of $1.9 million (8 cents per share) for the quarter ended February 28, compared with $4.8 million (19 cents) a year earlier. Revenues fell more than 15 percent to $30.1 million.
Chief Executive Daniel Greenberg said that while the amount of equipment the company had on rent remained relatively constant, its equipment leases and sales had weakened during the quarter. The company has been cutting costs by buying less inventory to rent and reducing labor costs.
"While we continue to work on identifying new sources of revenue, we must plan our business on the expectation of continued reduced revenues during the current economic climate," Greenberg said in a statement.
Electro Rent shares were up 64 cents, or 6.7 percent, to $10.13 in midday trading on the Nasdaq.
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