United Rentals posted total revenue of $1.597 billion in the second quarter compared with $1.421 billion in the same period last year, a 12.4-percent year-over-year hike. Rental revenue totaled $1.367 billion for the quarter compared to $1.204 billion a year ago, a 13.5-percent leap.
Within rental revenue, owned equipment rental revenue jumped 13.5 percent, reflecting an increase of 17.4 percent in the volume of equipment on rent. However, this increase was partially offset by a 1.2-percent decrease in rental rates.
Pro forma rental revenue, representing the combination of United Rentals and NES Rental – United’s acquisition of NES Rental closed April 3 – increased 6.2 percent year over year, reflecting growth of 6.6 percent in volume of equipment on rent, partially offset by a 0.4-percent decline in rental rates.
Adjusted EBITDA was $747 million and adjusted EBITDA margin was 46.8 percent, an increase of $68 million and decrease of 100 basis points year over year for the second quarter.
Time utilization increased 190 basis points year over year to 69.4 percent, a second quarter record, with each month in the quarter establishing a new monthly record. On a pro forma basis, time utilization increased 210 basis points year over year.
United Rentals’ Trench, Power and Pump specialty segment’s rental revenue jumped 18.5 percent year over year, primarily on a same-store basis, while the segment’s rental gross margin improved by 250 basis points to 49.6 percent.
“The broad demand we saw early this year continued throughout the second quarter as we entered our busy season,” said Michael Kneeland, CEO of United Rentals. “This was reflected in our strong year-over-year performance, with volume up 6.6 percent on a pro forma basis, record second quarter time utilization and an improved rate trend across our business. The NES integration and Project XL are both well underway and on track.
“We remain encouraged by the level of customer activity and the industry’s ongoing absorption of fleet. Given our visibility into the balance of 2017, we’ve increased our full-year guidance for total revenue, adjusted EBITDA, capex and free cash flow. Our focus remains on balancing growth with margins, free cash flow and returns to maximize our long-term value.”
For the first six months of 2017, rental revenue increased 9.1 percent year over year. Owned equipment rental revenue increased 8.8 percent year over year, reflecting a 12.4-percent jump in the volume of equipment on rent, partially offset by a 1.2-percent decrease in rental rates. Pro forma rental revenue increased 5.1 percent year over year, reflecting 6.5-percent growth in the volume of equipment on rent, partially offset by a 0.9-percent drop in rental rates.
United’s Trench, Power and Pump specialty segment’s rental revenue increased 17.7 percent for the first six months of the year, while the segment’s rental gross margin improved by 250 basis points to 47.2 percent.
United has increased its full year guidance, now expecting total revenue for the full year to be in the range of $6.25 billion to $6.4 billion, compared to its previous anticipated range of $6.05 billion to $6.25 billion. It now expects adjusted EBITDA in the range of $2.95 billion to $3.025 billion, compared to the previous expectation of $2.835 billion to $2.985 billion. It now plans net rental capital expenditures of $1.05 billion to $1.15 billion, compared to its previous plan of $925 million to $1.075 billion.
The size of United Rentals rental fleet was $10.27 billion of original equipment cost on June 30, compared with $8.99 billion on Dec. 31, 2016. The age of the rental fleet was 46.7 months on June 30, compared with 45.2 months on Dec. 31.
Based in Stamford, Conn., United Rentals is No. 1 on the RER 100.
