United Rentals' (URI) Q4 Earnings In Line, 2018 View Upbeat
Zacks Investment Research | Jan 24, 2018 08:31PM ET
Shares of United Rentals Inc. (NYSE:URI) fell 0.4% in after-hours trading following fourth-quarter 2017 earnings release. Earnings were in line with the Zacks Consensus Estimate but increased from the prior-year quarter owing to changes in tax laws and higher rental revenues.
Adjusted earnings of $3.34 (excluding the benefit associated with the enacted tax reform) were in line with the Zacks Consensus Estimate. Earnings, however, increased 25.1% year over year.
Revenues
Total revenues of $1.92 billion surpassed the Zacks Consensus Estimate of $1.88 billion by 2.1%. Revenues increased 26.3% year over year.
Rental revenues were also up 26.8% from the year-ago quarter to $1.65 billion. Volume of equipment on rent increased 28.7% and rental rates inched up 1.1%.
Margins
Total equipment rentals gross margin expanded 30 basis points (bps) year over year to 44.4%.
Adjusted EBITDA improved 26.4% year over year to $947 million and adjusted EBITDA margin increased 10 bps to 49.3% in the quarter.
Segment Discussion
General Rentals: Segment rental revenues increased 24.7% year over year to $1.4 billion. Segment equipment rentals’ gross profit rose 24.5% to $600 million. However, gross margin declined 10 bps year over year.
Trench, Power and Pump: Segmental rental revenues increased 38.7% year over year to $276 million, primarily on a same-store basis. Equipment rentals gross profit rose 45.6% to $131 million and gross margin improved 230 bps on a year-over-year basis.
Time Utilization & Fleet Size
Time utilization increased 70 bps to 70% from the year-ago level.
The size of the rental fleet was $11.5 billion of original equipment cost (OEC) as of Dec 31, 2017, compared with $8.99 billion as of Dec 31, 2016. The age of the rental fleet was 47 months on an OEC-weighted basis as of Dec 31, 2017, compared with 45.2 months as of Dec 31, 2016.
United Rentals, Inc. Price, Consensus and EPS Surprise
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