United Rentals Grows Rental Revenue 4.4 Percent in First Quarter
United Rentals increased its total first quarter revenue to $1.356 billion compared to $1.310 billion in the first quarter of 2016, a 3.5-percent increase, while rental revenue jumped 4.4 percent year over year from $1.117 billion a year ago to $1.166 billion. On a GAAP basis, United reported first quarter net income of $109 million ($1.27 per diluted share) compared with $92 million in the first quarter of 2016 ($1.01 per diluted share).
Adjusted EBITDA was $591 million and adjusted EBITDA margin was 43.6 percent, an increase of $7 million and a decrease of 100 basis points year over year.
Time utilization increased 190 basis points year over year to 66 percent, a first quarter record for the company.
United Rentals’ Trench, Power and Pump specialty segment’s rental revenue jumped 16.7 percent in the quarter, from $162 million to $189 million. Its general rental segment increased 2.3 percent from $955 million in Q116 to $977 million in the recently concluded frame.
Owned equipment rental revenue increased 3.8 percent year over year, reflecting an increase of 7 percent in the volume of equipment on rent, partially offset by a 1.4-percent decrease in rental rates.
“We were pleased with our momentum in the first quarter, particularly our 7 percent growth in volume and record time utilization driven by strength in our core construction markets,” said Michael Kneeland, United Rentals CEO. “It was also encouraging to see positive trends in our upstream oil and gas business after the headwinds faced over the last several years. While our rental rates remained under some pressure, they continue to support our reaffirmed standalone 2017 guidance for total revenue, adjusted EBITDA and capital spending, and our increased guidance for free cash flow.
“As we enter the critical part of the construction season, we’re very encouraged by the continued strength of key leading indicators, the tone of conversations with our customers and the industry’s disciplined response in adding fleet. Our focus remains on implementation of Project XL and other initiatives that should enhance our long-term value. With the integration of NES now underway, our updated guidance reflects the combined operations across the remainder of 2017, as well as our sustained confidence in the cycle.”
United Rentals updated its full-year guidance following the finalized acquisition of NES. It now expects total 2017 revenue in the range of $6.05 billion to $6.25 billion, compared to its previous expectation of between $5.75 billion and $5.95 billion. It now expects adjusted EBITDA in the range of $2.835 billion to $2.985 billion, compared to its previous expectation of between $2.7 billion and $2.85 billion. And its expected net rental capital expenditures after gross purchases is now $925 million to $1.075 billion after gross purchases of $1.45 billion to $1.55 billion. The company now expects net cash provided by operating activities of $1.85 billion to $2.05 billion compared to its previous expectation in the range of $1.675 billion to $1.875 billion. It expected free cash flow in the range of $800 million to $900 million.
United Rentals, based in Stamford, Conn., is No. 1 on the RER 100 with 968 rental locations in 49 states and every Canadian province.
