Strong First Quarter For United Rentals

May 15, 2006
United Rentals last week announced first-quarter 2006 diluted earnings of 19 cents per share, a 73-percent increase from 2005’s first quarter’s 11 cents per diluted share. Total revenues increased 15.6 percent from $732 million in Q105 to $846 million ...

United Rentals last week announced first-quarter 2006 diluted earnings of 19 cents per share, a 73-percent increase from 2005’s first quarter’s 11 cents per diluted share. Total revenues increased 15.6 percent from $732 million in Q105 to $846 million this year, while rental revenues increased 15 percent year over year, from $514 million in last year’s first quarter to $591 million in this year’s first quarter.

Sales of contractor suppliers jumped 37.5 percent year over year from $64 million in Q105 to $88 million this year. Net income jumped 67 percent from $12 million to $20 million. Free cash flow for the first quarter was $47 million after total capital expenditures of $264 million. Cash flow from operations was $226 million for the quarter, compared with $125 million for the same period in 2005.

Purchases of rental equipment increased from $152 million during last year’s first quarter to $243 million this year. The size of the fleet, measured by original equipment cost was $4.0 billion and the average fleet age was 40 months.

“Improved rental rates and higher time utilization on a larger rental fleet, together with excellent contractor supplies growth, helped us continue our strong performance this quarter,” said CEO Wayland Hicks. “We achieved record first-quarter dollar utilization of 58.6 percent. Same-store rental revenues were up 13.5 percent, reflecting growth across all three segments of our business. Our total revenue growth of 15.6 percent outpaced growth in our primary end market, private non-residential construction, where spending increased 10.6 percent in the first quarter according to Department of Commerce data.

“For the full year 2006, as a result of our continuing strong performance, we are raising our outlook for diluted earnings per share to a range of $2.17 to $2.27 on total revenues of $4.0 billion.”

Return on invested capital was 12.8 percent for the 12 months ended March 31, 2006, an improvement of 2.2 percentage points from 2005.

First-quarter 2006 revenues for general rentals were $750 million, an increase of 14.7 percent year over year. Rental rates for the quarter jumped 6.6 percent and same-store rental revenues increased 13.4 percent from the same period in 2006.

First-quarter 2006 revenues for trench safety, pump and power were $49 million, a 44 percent year-over-year increase from $34 million in last year’s first quarter. The acquisition of Sandvick Equipment and Supply in December 2005 contributed $6 million to first-quarter 2006 revenues. Rental rates in this arena increased 3.7 percent and same-store rental revenues increased 19 percent year over year.

In the traffic control segment, first quarter revenues were $47 million, up 6.8 percent from $44 million in Q105.

Based in Greenwich, Conn., United Rentals is No. 1 on this year’s RER 100.