Summary
United Rentals, Inc. (URI) reported a significant turnaround in 2011, moving from a net loss in 2010 to a net income of $101 million. This improvement was driven by a strong recovery in equipment rental revenue, which increased by 17.3% year-over-year, fueled by a 6.1% rise in rental rates and a 13.4% increase in the volume of equipment on rent. The company also saw a positive shift in its revenue mix, with National Account customers representing a larger portion (35%) of equipment rental revenue. A major strategic development for the company is the pending acquisition of RSC Holdings, Inc., announced in December 2011, for an enterprise value of $4.2 billion. This acquisition is expected to be completed in the first half of 2012 and will significantly expand United Rentals' scale and market presence. Despite the positive operational and strategic developments, the company's financial position remains heavily influenced by its debt load, which is expected to increase substantially upon completion of the RSC acquisition. While the company improved its liquidity position and amended its credit facilities, investors should remain aware of the leverage associated with the pending transaction. The company is also strategically focusing on operational efficiencies, customer service improvements, and expansion into industrial markets to drive future profitability.
Financial Highlights
50 data points| Revenue | $2.61B |
| Cost of Revenue | $1.71B |
| Gross Profit | $898.00M |
| SG&A Expenses | $407.00M |
| Operating Income | $396.00M |
| Net Income | $101.00M |
| EPS (Basic) | $1.62 |
| EPS (Diluted) | $1.38 |
| Shares Outstanding (Basic) | 62.18M |
| Shares Outstanding (Diluted) | 73.35M |
Key Highlights
- 1Achieved net income of $101 million in 2011, a substantial improvement from a net loss of $26 million in 2010.
- 2Equipment rental revenue grew by 17.3% to $2.151 billion in 2011, driven by a 6.1% increase in rental rates and a 13.4% increase in rental volume.
- 3National Account customer revenue increased to 35% of total equipment rental revenue, up from 31% in 2010, indicating a successful focus on larger clients.
- 4Entered into a definitive agreement to acquire RSC Holdings, Inc. for an enterprise value of $4.2 billion, a move expected to significantly enhance market position and scale.
- 5The company's fleet OEC grew to $4.3 billion, reflecting strategic investments in equipment.
- 6Implemented several technology and operational initiatives to improve rental rate performance, customer service, and efficiency.
- 7Managed to improve SG&A expenses as a percentage of revenue by 0.8 percentage points, demonstrating cost control efforts.