United Rentals posted $1.315 billion in the first quarter, compared with $1.178 billion in the first quarter of 2015, an 11.6 percent increase. Rental revenue jumped to $1.125 billion compared with $1.005 billion a year ago, a comparable 11.9-percent hike.
On a GAAP basis, United Rentals reported first quarter net income of $115 million or $1.16 per diluted share, compared with $60 million, or $0.56 per diluted share in the year-ago quarter.
Within rental revenue, owned equipment rental revenue leapt 12 percent, with 8.1 percent higher volume of equipment on rent and a 2.9-percent rental rate hike. Excluding the impact of the acquisition of National Pump, rental revenue increased 7.3 percent year over year. Return on invested capital was 9 percent for the 12 months ended March 31, 2015, an increase of 1.2 percentage points from the 12 months ended March 31, 2014.
Time utilization decreased 40 basis points year over year to 64.2 percent. The locations from the National Pump acquisition experienced volume and pricing pressure associated with upstream oil-and-gas customers, which was a primary driver of the time utilization decline. Time utilization was 64.5 percent excluding the impact of the National Pump acquisition.
“We turned in a solid first quarter, with record revenue, EBITDA and ROIC,” said CEO Michael Kneeland. “The year has had some early headwinds, including a decline in upsteam oil and gas activity, a harsh winter, and the adverse currency impact of a strong U.S. dollar. We’ve offset these pressures by redistributing under-utilized fleet to areas of higher demand. An improving rental landscape and the strong performance of our power and trench specialty lines, helped drive our 12-percent increase in rental revenue.
“Looking to the rest of the year, we expect a continued rebound in construction activity, along with our usual seasonal uptick. We also expect secular penetration to continue. We’re investing in our sales force, and we plan to open about 18 specialty rental branches this year. Our employees are excited to deliver a level of service that sets us apart in this environment.”
The company has slightly moderated its full-year outlook, with the expectation for total revenue, previously in the range of $6 billion to $6.2 billion now in the range of $6 billion to $6.1 billion. Similarly, it has altered its adjusted EBITDA expectation from the previous range of $2.95 billion to $3.05 billion, now at $295 billion to $3 billion.
It also moderated expectations for rental rate increases from about 3.5 percent to about 3 percent.
United Rentals, based in Stamford, Conn., and No. 1 on the RER 100, has 888 locations in 49 states and 10 Canadian provinces.
