22.04.2012

United up 25%

United Rentals has announced its first quarter results, with revenues up over 25 percent to $656 million, of which rental was $523 million, 20.5 percent higher than a year ago.

The company posted a pre-tax profit for the period of $19 million, compared to a loss of $27 million in the same quarter last year.

Rental rates were up 6.3 percent, while equipment on rent increased 18.4 percent, thanks to a larger fleet and better utilisation at 62.3 percent – 1.2 percent better than this time last year.

The company says that it is targeting a full year increase in rental rates of around five percent.

Chief executive Michael Kneeland said: "Our performance surpassed all prior first quarters, with record time utilization, record fleet growth, and record adjusted EBITDA, both dollars and margin. Once again, we drove profitable growth faster than the construction recovery. Both core areas of our business - general rentals and specialty operations - realized higher rates year-over-year on a fleet that was about $600 million larger on average. These results speak volumes about the effectiveness of our strategy and the on-going secular shift toward renting."

"Current market dynamics create a favourable environment for our combination with RSC. We expect to complete the transaction on April 30, and move immediately into integration mode. The benefits are substantial, including more than $200 million in cost synergies, an unparalleled branch footprint, and significant penetration into the industrial sector."

Vertikal Comment

A solid quarter from United which shows the significant gains it is making on leading the way with rental rate improvements. Shareholders decide on Friday next about whether to approve the takeover of RSC or not. The deal is almost certain to gain approval, even though the future looks bright without this combination.

Hopefully the combination will at the very least maintain the current progress.