Greenwich, Conn.-based United Rentals, Inc. announced last week that it expects diluted earnings per share of $0.53 for the second quarter of 2005. The company also reaffirmed its previous full year 2005 outlook for diluted earnings per share of $1.60 to $1.70 and free cash flow of at least $200 million after total capital expenditures of approximately $750 million.
As previously announced, the company has delayed reporting final results for 2004 and will delay finalizing results for 2005 interim periods until after it reports 2004 results. Accordingly, the company will delay filing its second quarter Form 10-Q beyond the due date and the five-day extension period. The earnings, financial highlights, other selected financial data and 2005 outlook reported are preliminary and subject to change based on completion of the 2004 audit or the outcome of the previously announced SEC inquiry and the related internal review.
Total revenues for the second quarter of 2005 were $896 million, an increase of 15.5 percent compared with $776 million for the same period last year. The size of the rental fleet, as measured by the original equipment cost, was $3.9 billion and the age of the rental fleet was 39 months at June 30, 2005, compared with $3.7 billion and 40 months at year-end 2004.
Total revenues for the first six months of 2005 were $1.63 billion, an increase of 14.6 percent compared with $1.42 billion for the first six months of 2004. Cash flow from operations was $356 million during the first half of 2005 compared with $359 million during the 2004 period. Cash flow from operations during the first half of 2005 was essentially the same as in the first half of 2004 due primarily to the impact of lower cash generated from working capital in 2005.
Purchases of rental equipment were $482 million in the first half of 2005 compared with $322 million in the first half of 2004. Free cash flow during the first half of 2005 was negative $21 million compared with free cash flow generation of $110 million during the first half of 2004. The decline in free cash flow was largely the result of the $160 million increase in rental fleet investment. The total cash balance was $254 million at June 30, 2005, a decrease of $48 million from year-end 2004.
Second quarter 2005 revenues for general rentals were $823 million, an increase of 16 percent compared with $709 million for the second quarter of 2004. Rental rates for the second quarter increased 5.2 percent and same-store rental revenues increased 11.3 percent from the second quarter of 2004.
First half 2005 revenues for general rentals were $1.51 billion, an increase of 15.4 percent compared with $1.31 billion for the first half of 2004. Rental rates for the first half increased 7.1 percent and same-store rental revenues increased 11.2 percent from the first half of 2004. General rentals segment revenues represented 93 percent of total revenues in the first six months of 2005.
Second quarter 2005 revenues for traffic control were $73 million, an increase of 10.2 percent compared with $67 million for the second quarter of 2004. Same-store rental revenues for the second quarter increased 12.6 percent from the second quarter of 2004.
First half 2005 revenues for traffic control were $117 million, an increase of 4.7 percent compared with $112 million for the first half of 2004. Same-store rental revenues for the first half increased 6.3 percent from the first half of 2004.
CEO Wayland Hicks said, “Our strong performance this quarter reflects our success in continuing to improve rental rates, while at the same time expanding our rental fleet and increasing time utilization.
“To drive future growth, we are opening new branches in attractive markets. We expect to open 30 to 35 new branches in 2005, including the 18 we’ve already opened. These branches will increase our presence in existing markets and expand our footprint into new areas.
“We are also continuing to grow our sales of contractor supplies at a rapid pace. These sales were up 48 percent compared with last year’s second quarter, and we have opened eight regional distribution centers to support future growth.”
Greenwich, Conn.-based United Rentals is No. 1 on the RER 100.