UNITED RENTALS, INC. Quarterly Report for Q3 Ended Sep 30, 2016

Summary

United Rentals, Inc. (URI) reported its third-quarter 2016 financial results, reflecting a challenging but stabilizing operating environment. Total revenues for the quarter were $1.508 billion, a slight decrease from $1.550 billion in the prior year, primarily driven by a decline in equipment rental revenue due to ongoing pressures on rental rates. Despite this, the company saw an increase in the volume of equipment on rent, particularly in its trench, power, and pump segment, which experienced significant growth. Net income for the quarter stood at $187 million, down from $215 million in the prior year, resulting in diluted earnings per share of $2.16, compared to $2.25. This decrease was influenced by rental rate pressures, particularly in the oil and gas and Canadian markets. However, the company's operational efficiency initiatives and strategic focus on higher-margin segments are showing promise. Liquidity remains solid with $297 million in cash and cash equivalents and $1.06 billion in available liquidity as of September 30, 2016. The company continues to execute its share repurchase program, signaling confidence in its financial position and future prospects.

Key Highlights

• 1Total revenues for the nine months ended September 30, 2016, were $4.239 billion, a slight decrease of 1.2% from $4.294 billion in the prior year.
• 2Equipment rentals, the company's primary revenue source, decreased slightly by 0.8% year-over-year for the nine months ended September 30, 2016, impacted by a 2.2% decrease in rental rates.
• 3Net income for the nine months ended September 30, 2016, was $413 million, down from $416 million in the same period last year.
• 4Diluted earnings per share for the nine months ended September 30, 2016, were $4.66, an increase from $4.27 in the prior year.
• 5The company's balance sheet shows total assets of $12.275 billion as of September 30, 2016, with a significant portion represented by rental equipment ($6.427 billion) and goodwill ($3.267 billion).
• 6Total liabilities were $10.736 billion, with long-term debt comprising a substantial portion ($7.393 billion).
• 7Cash and cash equivalents increased to $297 million as of September 30, 2016, from $179 million at the end of 2015, indicating improved short-term liquidity.
• 8The company maintained compliance with its debt covenants, and reported $1.06 billion in available liquidity as of October 17, 2016.

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