01—Abstract
Summary
Summary of the 10-Q filed October 27, 2021. Cited figures are marked; the original filing is the authoritative source.
United Rentals, Inc. reported a strong third quarter of 2021, demonstrating significant revenue growth and improved profitability compared to the prior year.
Total revenues increased by 18.7% to $2.6 billiona, driven primarily by a robust rebound in equipment rentals, up 22.4%, reflecting recovery across key end-markets and the impact of strategic acquisitions. The company's net income more than doubled year-over-year to $409 million, and diluted earnings per share rose to $5.63. This performance highlights the company's successful navigation of the post-pandemic economic environment and the integration of recent acquisitions.
The company's strategic focus on fleet productivity, customer service, and operational efficiencies continues to yield positive results. The acquisition of General Finance in May 2021 has expanded United Rentals' geographic reach into Australia and New Zealand and bolstered its specialty rental segment. Despite increased SG&A expenses related to improved profitability and higher bonus accruals, the company maintained strong gross margins, particularly in equipment rentals and used equipment sales, signaling effective operational management and favorable market conditions for its services.
02—Key points
Key Highlights
- Total revenues surged by 18.7% to $2.6 billion for the three months ended September 30, 2021, compared to $2.2 billion in the prior year period.
- Equipment rental revenue increased by a significant 22.4% to $2.3 billion, driven by higher fleet productivity and increased average Original Equipment Cost (OEC) due to acquisitions.
- Net income more than doubled, reaching $409 million for the quarter, up from $208 million in the same period last year.
- Diluted earnings per share (EPS) increased to $5.63 from $2.87 in the prior year's third quarter.
- The acquisition of General Finance in May 2021 contributed to the growth, expanding the company's presence into Australia and New Zealand and strengthening its specialty segment.
- Adjusted EBITDA saw a slight increase of 14.1% to $1.23 billion, though the adjusted EBITDA margin decreased by 190 basis points to 47.5% due to higher SG&A expenses and rental equipment margins.
- The company maintained strong liquidity, with $2.611 billion in available liquidity at the end of the quarter, comprised of cash and credit facilities.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2021, United Rentals, Inc. kept $0.16.
- Revenue$2.60B100.0%
- Cost of revenue−$1.49B57.5%
- Gross profit$1.10B42.5%
- Operating costs−$424.0M16.3%
- Operating income$679.0M26.2%
- Interest, other & tax−$270.0M10.4%
- Net income$409.0M15.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2021filed October 27, 2021Financial Statements
Q3 FY2021 against Q3 FY2020
| Line item | Q3 FY2021Q3 FY2020 | Change |
|---|---|---|
| Revenue | $2.60B$2.19B | +18.7% |
| Cost of Revenue | $1.49B$1.30B | +14.8% |
| Gross Profit | $1.10B$886.00M | +24.5% |
| SG&A Expenses | $326.00M$232.00M | +40.5% |
| Operating Income | $679.00M$551.00M | +23.2% |
| Net Income | $409.00M$208.00M | +96.6% |
| EPS (Basic) | $5.65$2.88 | +96.2% |
| EPS (Diluted) | $5.63$2.87 | +96.2% |
| Shares Outstanding (Basic) | 72.46M72.19M | +0.4% |
| Shares Outstanding (Diluted) | 72.71M72.44M | +0.4% |
05—Questions
Frequently Asked Questions
What were the primary drivers of revenue growth in Q3 2021?
Revenue growth was primarily driven by a significant increase in equipment rentals, up 22.4%, attributed to improved fleet productivity and a higher average Original Equipment Cost (OEC), which was influenced by strategic acquisitions like General Finance. The broader economic recovery across construction and industrial markets also contributed positively.
How did the acquisition of General Finance impact the company's performance?
The acquisition of General Finance, completed in May 2021, expanded United Rentals' geographic footprint into Australia and New Zealand and enhanced its specialty rental segment. It contributed to increased total revenues and Original Equipment Cost (OEC).
What is the company's liquidity position?
United Rentals maintained a strong liquidity position, with $2.611 billion in available liquidity at the end of the third quarter of 2021. This includes cash and cash equivalents, along with availability under its asset-based revolving credit facility (ABL facility) and accounts receivable securitization facility.
How has the company managed its debt and capital structure?
During the nine months ended September 30, 2021, the company issued $750 million in senior notes, redeemed $1 billion in existing senior notes, and amended its accounts receivable securitization facility. Total debt increased by 4.4% to $10.1 billion, primarily due to borrowings to fund the General Finance acquisition, partially offset by cash from operations.
06—Continue