United Rentals posted a 16.4-percent increase in rental revenue for the second quarter, along with a 6.1-percent hike in rental rates and 13.8-percent increase in the volume of equipment on rent. Total revenue was $629 million, compared with $557 million for the same period a year ago, a 12.9-percent jump, while rental revenue was $624 million, compared with $450 million for the year-ago quarter.
On a GAAP basis, the company reported second-quarter 2011 income from continuing operations of $28 million, or $0.38 per diluted share, compared with $12 million or $0.18 per diluted share a year ago. Time utilization was 69 percent, an increase of 3.6 percentage points from the same period a year ago, and a new second-quarter record for the company. United raised its outlook for a full-year increase in time utilization to about 2.5 percentage points year over year.
United Rentals generated $41 million from used equipment sales at a gross margin of 31.7 percent, compared with $37 million in last year’s second quarter, at a gross margin of 24.3 percent. Adjusted EBITDA was $221 million, an increase of $42 million year over year, with adjusted EBITDA margin of 35.1 percent, a 3.0-percentage point increase from last year’s second quarter.
“Our strong numbers in the quarter defied a flat construction environment and elevated our performance well above the same period last year,” said Michael Kneeland United Rentals CEO. “It was our fifth consecutive quarter of record time utilization, with a gain of more than six points of rate on a larger fleet. As we capitalize on the increasing demand for our equipment, we are also scrutinizing our cost structure for sound ways to enhance our operating leverage."
In looking ahead to the balance of the year, Kneeland was optimistic. “We expect our performance to remain robust as we move closer to our near-term goal of a billion dollars of EBITDA and stronger margins,” he said. “Although the recovery itself can be difficult to predict, our results are being propelled by a strategic plan that does not rely on our operating environment. We are continuing to shape our customer mix, fleet mix and operations in ways that create demand for our equipment now and in the long term.”
For the first half of 2011, total revenue was $1,152 million, an 11.3-percent jump compared with $1,035 million for the first half of 2010. United Rentals posted $958 million in rental revenue, compared with $830 million for the first half of 2010, an increase of 15.4 percent.
The size of the rental fleet was $4.18 billion of original equipment cost on June 30, 2011, compared with $3.79 billion on December 31, 2010. The age of the rental fleet was 46.5 months, compared with $47.7 months Dec. 31.
United Rentals spent $297 million on purchases of rental equipment, compared with $125 million for last year’s second quarter. For the first half of 2011, United spent $412 million for the first six months of the year, compared with $174 million for the first six months of 2010.
Based in Greenwich, Conn., United Rentals is No. 1 on the RER 100.