United Rentals last week announced second quarter 2007 continuing operations diluted earnings per share of $.60, an increase of 11 percent compared with $0.54 for the second quarter 2006. Income from continuing operations increased 14 percent year over year to $67 million, up from $59 million in Q206. Total revenues of $966 million for the quarter jumped 5 percent from $919 million last year, while rental revenue increased 4.8 percent from $630 million in the second quarter of last year to $660 million in the same period this year.
The size of the rental fleet, as measured by original equipment cost, was $4.3 billion with an average age of 37 months as of June 30, compared with $3.9 billion and 39 months at year-end 2006 and $4 billion and 38 months at the end of last year’s second quarter.
EBITDA improved $24 million to $295 million. Time utilization improved 3.7 percentage points, offsetting a 1.2-percent decline in rental rates. Same-store rental revenue increased 3.5 percent.
“Our strong performance in the second quarter reflects the initial impact of our strategy to refocus on our core business of equipment rental and drive more profitable revenue growth,” said United Rentals CEO Michael Kneeland. “We achieved significantly higher time utilization on a larger fleet, offsetting a modest decline in rental rates. Our EBITDA margin and SG&A expense ratio both improved in response to a number of internal initiatives put in place in the second quarter.”
On July 23, United announced it had signed a definitive merger agreement to be acquired by affiliates of Cerberus Capital Management L.P. The board of directors has approved the merger agreement, and has recommended approval by United Rentals stockholders. However, the company may continue to solicit proposals for alternative transactions from third parties through Aug. 31. The company currently expects the transaction to close in the fourth quarter.
Based in Greenwich, Conn., United Rentals is No. 1 on the RER 100.
