United Rental rises on strong 4Q revenue
Feb. 7, 2011 – Shares of United Rentals Inc. jumped last week after the equipment rental company reported fourth-quarter revenue that easily topped Wall Street estimates, paced by brisker sales and rising rental rates.
By Stefanie Croley
Feb. 7, 2011 – Shares of United Rentals Inc. jumped last week after the equipment
rental company reported fourth-quarter revenue that easily topped Wall
Street estimates, paced by brisker sales and rising rental rates.
The company added that it expects robust growth even though its customers are slowly recovering from the global downturn.
"Our strategy has been to stay in front of key customer
segments through the worst of times, earning their confidence for
exactly this point in the cycle," said Michael Kneeland, chief executive
officer. "As a result, we expect to outpace what we see as a modest
recovery in our end markets."
The stock rose $1.16, or 4.2 percent, to $28.69 in late Wednesday trading.
United Rentals narrowed its quarterly loss to $21
million, or 35 cents per share, in the period ended Dec. 31. That
compares with a year-earlier loss of $26 million, or 43 cents per share.
Excluding one-time items, the company swung to a
profit, earning 16 cents per share, compared with a 21 cent loss in the
same period a year earlier. Analysts polled by FactSet were expecting 18
cents per share. Analysts typically exclude one-time items from their
Revenue rose to $597 million from $557 million, easily surpassing the $574.7 million analysts were expecting.
United Rentals, based in Greenwich, is the world's
largest equipment rental company. It operates in 48 states and 10
Canadian provinces, renting equipment to construction sites, industrial
customers, utility companies, municipalities and homeowners.
After this latest quarter, the company's core rental business accounted for 83 percent of total revenue, up from 81 percent.
The jump in revenue was helped by 1.2 percent increase
in rental rates and a 10.4 percent increase in rental revenue. Counting
only rental locations that have been open at least a year, rental
revenue rose 14.3 percent.
The company added that the size of its rental fleet,
measured by the original equipment cost, at the end of the year rose to
$3.79 billion from $3.76 billion in 2009.
For the year, the company's loss narrowed to $26
million, or 44 cents per share. In 2009, it posted a loss of $62
million, or $1.02 per share.
Revenue remained dipped to $2.24 billion from $2.36 billion.
For the 2011 fiscal year, the company expects rental rates to rise 5 percent and time utilization to rise 1 percentage point.
It also expects free cash flow between $10 million and $50 million and gross rental purchases of about $625 million.
The company did not issue any earnings guidance.