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United Rentals CEO Upbeat on Construction Sector

April 21, 2014, 06:50 AM
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United Rentals announced financial results for the first quarter 2014. Total revenue was $1.178 billion and rental revenue was $1.005 billion, compared with $1.100 billion and $916 million, respectively, for the same period last year. On a GAAP basis, the company reported first quarter net income of $60 million compared with $21 million for the same period last year.

Rental revenue (which includes owned equipment rental revenue, re-rent revenue and ancillary items) increased 9.7% year-over-year. Within rental revenue, owned equipment rental revenue increased 9.1%, reflecting year-over-year increases of 7.6% in the volume of equipment on rent and 4.3% in rental rates. The company has reaffirmed its outlook for a full-year increase in rental rates of approximately 4%, and full year total revenue in a range of $5.45 billion to $5.65 billion.

Adjusted EBITDA was $519 million and adjusted EBITDA margin was a first quarter record 44.1%, an increase of $68 million and 310 basis points, respectively, from the same period last year. The company has reaffirmed its outlook for full year adjusted EBITDA in a range of $2.55 billion to $2.65 billion, and it currently expects to be near the top of that range.

Michael Kneeland, chief executive officer of United Rentals, said, "We're off to a strong start in 2014, with notable year-over-year growth in rates, time utilization and volume. Our adjusted EBITDA margin improved to over 44%, a first quarter record. Despite the headwind of a harsh winter, we strategically managed our business to capitalize on pockets of opportunity. We now see solid demand in almost every market, giving us further confidence in our full year outlook."

Kneeland continued, "The feeling in the field is upbeat -- our customers and managers are bullish about business prospects, including the long-awaited recovery in commercial construction. We plan to leverage our scale in this environment and bring in about $750 million of fleet in the second quarter. The integration of our National Pump acquisition is going well, and we've opened three new specialty branches in trench safety, power and HVAC. These are just a few of the many growth initiatives that will drive our short and long-term performance."

To read the full earnings press release, click here.

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