Summary
United Rentals, Inc. (URI) reported solid financial results for the quarter and six months ended June 30, 2017. Total revenues increased by 13.5% and 9.1% for the respective periods, primarily driven by a significant increase in equipment rental revenue, up 17.4% and 12.4%, respectively. This growth was fueled by a substantial rise in the volume of equipment on rent, largely attributable to the strategic acquisition of NES Rentals Holdings II, Inc. ("NES") in April 2017. While rental rates experienced a slight decrease, the overall increase in rental volume and the integration of NES contributed positively to revenue performance. The company also showed improvements in its Trench, Power, and Pump segment, indicating broader market demand. Profitability metrics such as Net Income and Diluted Earnings Per Share also saw an increase compared to the prior year. Net income rose to $141 million ($1.65 diluted EPS) for the quarter and $250 million ($2.92 diluted EPS) for the six months. Despite some pressure on rental rates and increased delivery costs, the company's proactive management of its fleet and operational efficiencies, including the ongoing implementation of 'Lean' techniques and Project XL, are supporting robust performance. The company ended the period with a strong liquidity position, emphasizing its ability to manage its operations and pursue future growth opportunities, including further integration of the NES acquisition.
Financial Highlights
50 data points| Revenue | $1.60B |
| Cost of Revenue | $942.00M |
| Gross Profit | $655.00M |
| SG&A Expenses | $218.00M |
| Operating Income | $340.00M |
| Net Income | $141.00M |
| EPS (Basic) | $1.67 |
| EPS (Diluted) | $1.65 |
| Shares Outstanding (Basic) | 84.64M |
| Shares Outstanding (Diluted) | 85.41M |
Key Highlights
- 1Total revenues for the three months ended June 30, 2017 increased by 13.5% to $1.60 billion, and for the six months ended June 30, 2017, increased by 9.1% to $2.95 billion, compared to the prior year periods.
- 2Equipment rental revenue saw significant growth, increasing by 17.4% to $1.37 billion for the quarter and 12.4% to $2.53 billion for the six months, driven by a 17.4% and 12.4% increase in the volume of OEC (Original Equipment Cost) on rent, respectively.
- 3The acquisition of NES Rentals Holdings II, Inc. ("NES") in April 2017 significantly contributed to the revenue growth, with pro forma equipment rental revenue increasing by 6.2% for the quarter and 5.1% for the six months, even with a slight dip in rental rates.
- 4Net income increased to $141 million for the quarter and $250 million for the six months, up from $134 million and $226 million, respectively, in the prior year.
- 5Diluted Earnings Per Share (EPS) improved to $1.65 for the quarter and $2.92 for the six months, up from $1.52 and $2.52, respectively.
- 6The Trench, Power, and Pump segment showed strong performance, with equipment rentals increasing by 18.5% for the quarter and 17.7% for the six months, driven by improved demand from upstream oil and gas, and construction and mining customers.
- 7The company maintained a strong liquidity position, with $338 million in cash and cash equivalents and $1.04 billion in available liquidity as of June 30, 2017.