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United Rentals Announces Q3 2011 Results

Company grows rental revenue 19.1 percent in quarter.


United Rentals, Inc. (NYSE: URI) today announced financial results for the third quarter 2011. Total revenue was $713 million and rental revenue was $604 million, compared with $605 million and $507 million, respectively, for the same period last year.

Q3 2011 Highlights

Rental revenue increased 19.1%, reflecting year-over-year increases of 7.5% in rental rates and 15.0% in the volume of equipment on rent. The company has updated its outlook for an increase in rental rates to about 6% for the full year.

Time utilization was 73.5%, an increase of 2.2 percentage points from the same period last year, and a record high for the company. The company has raised its outlook for a full-year increase in time utilization to approximately 3.0 percentage points year-over-year.

The company generated $42 million of proceeds from used equipment sales at a gross margin of 35.7%, compared with $32 million of proceeds at a gross margin of 31.3% for the same period last year.

Adjusted EBITDA was $282 million, an increase of $66 million compared with the same period last year. Adjusted EBITDA margin was 39.6%, an increase of 3.9 percentage points compared with the same period last year, and a record for the company.

CEO Comments

Michael Kneeland, chief executive officer of United Rentals, said, "Our strong performance is evidence of a strategy that has become deeply rooted in our operations. The benefits of customer segmentation, price optimization, customer service differentiation and cost efficiency have begun to mesh in all areas of the business. This has put us in a position to act decisively on growth opportunities, such as the $219 million we invested in fleet in the quarter. Not only did this help to strengthen customer relationships and drive revenues, we also realized a historic high adjusted EBITDA margin of 39.6%."

Kneeland continued, "While our customers remain bullish about construction activity next year and there is a deepening belief in rental penetration, our business model provides us with the flexibility to respond, as we have in the past, to anything we may experience in 2012."

On a GAAP basis, the company reported third quarter 2011 net income of $65 million, or $0.91 per diluted share, compared with $23 million, or $0.33 per diluted share, for the same period last year. Adjusted EPS for the quarter, which excludes the impact of special items, was $0.92 per diluted share, compared with $0.40 per diluted share for the same period last year.

www.unitedrentals.com

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