25.04.2025

Profit slip for United

US based United Rentals has reported its first quarter results with higher revenues but lower profit.

Total revenues for the three months to the end of March were $3.72 billion, up 7.4 percent on the same quarter last year’s record. The revenue gains came mostly from rental, with other areas all up except for used equipment sales which were slightly lower.

Pre-tax profit however came in one percent below last year’s levels at $688 million.

Capital expenditure in the first three months was $707 million almost 19 percent higher than this time last year. The company is forecasting a full year spend of $3.65 to $3.95 billion.

OutlookThe company’s full year revenue forecast is $15.6 to $16.1 billion which would represent an increase of up to five percent over 2024.

Chief executive Matt Flannery said: “2025 is off to a solid start, reflecting demand across both our construction and industrial end markets. I’m pleased with the team’s commitment to putting our customers first, which ultimately translated to record first quarter revenue and adjusted EBITDA. I’m also pleased to reaffirm our full year guidance, based on both the momentum we’re carrying into our busy season and continued positive customer sentiment, which, together, reinforce our expectations for another year of profitable growth.”

“We remain laser focused on executing our unique and well proven strategy. This allows us to capitalise on the opportunities ahead and to differentiate ourselves from the competition. Our resilient business model, combined with prudent capital allocation, including our new $1.5 billion share repurchase authorisation, and balance sheet strength, allows us to continue driving profitable growth, strong free cash flow and compelling returns.”

Vertikal Comment

This is an OK start for United as it continues to grow its rental revenues, and maintains a decent profit level, the decline from last year is down to a number of things, including higher depreciation, higher intertest costs and higher sales and administration costs. None of which are massively significant.

This will be an interesting year in that it is possible that it may not land a mega acquisition this year, having lost the H&E deal to Herc. But that is no bad thing, the company could do a lot worse than consolidate its business with a focus on organic and greenfield growth, while repurchasing shares and reducing debt levels, ready for a big one in 2026.