United Rentals posted a 16.8-percent increase in rental revenue in the second quarter, from $1.009 billion a year ago to $1.179 billion this year. The company defined rental revenue as including owned equipment rental revenue, re-rent revenue and ancillary items.
Total revenue was $1.399 billion for the second quarter compared with $1.206 billion last year, a 16-percent leap. Adjusted earnings per share was $1.65 per diluted share, compared to $1.12 per diluted share a year ago. Adjusted EBITDA was $663 million with adjusted EBITDA margin of 47.4 percent, a second quarter record and an increase of $114 million year over year.
Return on invested capital was 8.1 percent for the 12 months ended June 30, an increase of 1.1 percentage points for the 12-month period ended June 30, 2013. Time utilization jumped 20 basis points year over year to 68.1 percent. The company generated $138 million of proceeds from used equipment sales at an adjusted margin of 48.6 percent, compared with $131 million and 42 percent for the same period a year ago.
“Our strong performance in the quarter reflects significantly more equipment on rent at better margins than a year ago, resulting in a new high-water mark for second quarter EBITDA margin,” said United Rentals CEO Michael Kneeland. “The rebound in non-residential construction is continuing to drive up demand, particularly in the energy and commercial sectors. Given the vigorous activity we’re seeing and the benefit of secular penetration, we’ve raised our full-year outlook – and we concur with the forecasts that show multiple years of healthy industry growth beyond 2014.”
Kneeland emphasized that United is “well into the expansion of our specialty segment, most notably the acquisition and integration of National Pump in the second quarter. Our pump customers now have access to our full range of fleet, and we’ll expand our cross-selling of pump assets to our broader customer base. In addition, we opened five specialty cold starts in Trench Safety, Power and HVAC and Tools, and acquired the four-location Blue-Stream Power and HVAC business in May. We’re very pleased with the caliber of our specialty acquisitions and the potential they represent for superior return on capital.”
Meanwhile, United Rentals updated its full-year outlook, now expecting total revenue in 2014 in the range from $5.55 billion to $5.65 billion (previously expecting $5.45 billion to $5.65 billion), and adjusted EBITDA of $2.65 billion to $2.70 billion, (previous expectation was $2.55 billion to $2.65 billion). United now expects an increase in rental rates, year over year of about 4.5 percent, where it previously expected 4 percent.
For the first six months of 2014, total revenue was $2.577 billion compared with $2.306 billion a year ago, an 11.7-percent leap. Rental revenue jumped 13.5 percent year over year, from $1.925 billion a year ago to $2.184 billion this year.
Based in Stamford, Conn., United Rentals is No. 1 on the RER 100.
