United Rentals posted total revenue of $1.891 billion for the second quarter compared to $1.597 billion for the second quarter of 2017, an 18.4-percent upswing. Rental revenue for the quarter was $1.631 billion compared with $1.367 billion for the same period a year ago, a 19.3-percent incline. On a GAAP basis, the company reported second quarter net income of $270 million, or $3.20 per diluted share, compared with $141 million, or $1.65 per diluted share, thus nearly doubling net income.
In the second quarter, volume of equipment on rent increased 15.9 percent and rental rates went up 2.8 percent year over year. Pro forma rental revenue increased 11.4 percent year over year, reflecting growth of 7.1 percent in the volume of equipment on rent and a 2.8 percent rental rate hike as well.
Time utilization decreased 20 basis points year over year to 69.2 percent, primarily reflecting the impact of the Neff acquisition. On a pro forma basis, time utilization was flat year over year. United’s Trench, Power and Pump specialty segment’s rental revenue increased 33.5 percent year over year, including a 21.9-percent hike on a same-store basis. The segment’s rental gross margin decreased by 110 basis points to 48.5 percent.
The company included the acquisitions of NES Rentals and Neff Rental in April and October 2017 respectively, included in company results to the acquisition dates. Pro forma results reflect the combination of United Rentals, NES and Neff for all periods presented.
“We were very pleased with the momentum of our business in the second quarter as strong gains in volume and rates helped drive better than 11 percent growth in pro forma rental revenue,” said Michael Kneeland, United Rentals CEO. “Importantly, demand remained robust across our construction and industrial verticals in both the U.S. and Canada. The Neff integration is largely complete, and we look forward to getting the process started with Baker this quarter.
“Everything we see internally and externally points to a durable cycle and continued industry discipline in managing fleet growth. Given this backdrop, we’ve raised our 2018 guidance for total revenue, adjusted EBITDA and capex. We remain focused on executing a balanced strategy of growth and returns to maximize long-term value.”
For the first six months of 2018, total revenue was $3.625 billion compared to $2.953 billion, a 22.8 percent increase. In equipment rentals, revenue was $3.090 billion, compared to $2.533, a 22-percent increase. Within rental revenue, owned equipment rental revenue increased 22.1 percent, reflecting increases of 20.6 percent in the volume of equipment on rent and a 2.4-percent incline in rental rates.
Pro forma rental revenue increased 10.7 percent year over year for the first six months of 2018, with a 2.8-percent rental rate increase.
Time utilization decreased 60 basis points to 67.2 percent for the six-month period, reflecting the impact of the NES and Neff acquisitions primarily.
The company’s Trench, Power and Pump specialty segment’s rental revenue increased by 34.9 percent year over year for the first six months, including a 23.7-percent increase on a same-store basis. The segment’s rental gross margin increased 20 basis points to 47.4 percent.
United Rentals, on the strength of a strong first half and robust demand, has raised its previous outlook. In terms of total revenue, it previously expected $7.3 billion to $7.6 billion, but now expects a range from $7.5 billion to $7.7 billion. It previously expected adjusted EBITDA in the range from $3.6 billion to $3.75 billion, and now expects from $3.675 billion to $3.775 billion. United previously expected net rental capital expenditures after gross purchases of $1.8 billion to $1.95 billion, but has raised that to a range from $1.9 billion to $2 billion.
