United Rentals posted total revenue of $2.290 billion in the second quarter, a 21.1–percent year–over–year increase compared to last year’s total of $1.891 billion. United Rental’s rental revenue jumped 20.2 percent to $1.960 billion, compared to $1.631 million a year ago. On a GAAP basis, the company reported second quarter net income of $270 million, or $3.44 per diluted share, compared with $270 million, or $3.20 per diluted share, for the same period a year ago.
Adjusted EBITDA increased 18.3 percent year over year to $1.073 billion, while adjusted EBITDA margin decreased 110 basis points to 46.9 percent. On a pro forma basis, year over year, net income increased 7.1 percent, adjust EBITDA jumped 6.6 percent and adjusted EBITDA margin increased 40 basis points.
“We were pleased with our solid growth in revenue for both our general rental and specialty segments and our adjusted EBITDA for the second quarter,” said Matthew Flannery, United Rentals CEO. “Importantly, the market outlook for the second half of 2019 remains positive based on feedback from our customers and the field. The multiple integrations we have underway will continue to gain traction in the back part of the year.
“Our updates to guidance reflect a slightly slower than expected pace for the BlueLine integration, as well as historically bad weather in several key regions this part quarter. As a result, we’ve trimmed the upper ends on total revenue and adjusted EBITDA by approximately 1 percent, and capex by $150 million, while raising our cash flow expectation. We remain confident in the health of the cycle and are well positioned to serve our customers with the strongest service offering in our history.”
Rental revenue of $1.960 billion reflected increases of 20.2 percent on an as–reported basis and 4.8 percent on a pro forma basis. The as–reported increase is primarily the result of the impact of the BakerCorp and BlueLine acquisitions. The pro forma increase is primarily because of growth in the company’s construction end markets.
The company completed the acquisition of BakerCorp in July 2018 and BlueLine Rentals in October 2018 and are included in the company’s results subsequent to the acquisition dates. Second quarter fleet productivity decreased 3.1 percent year over year, primarily because of the impact of the BakerCorp and BlueLine acquisitions. On a pro forma basis, fleet productivity increased 0.7 percent, reflecting improvements in rental rates and fleet mix, partially offset by lower time utilization caused by acquisition integration activities as well as adverse weather conditions.
The company generated $197 million of proceeds from used equipment sales in the second quarter at a gross margin of 41.1 percent and an adjusted gross margin of 49.2 percent. This compared to $157 million at a GAAP gross margin of 41.4 percent and an adjusted gross margin of 51.6 percent for the year–ago period.
Net income for the second quarter of $270 million was flat with last year. Second quarter rental revenue for United’s general rental segment increased 14.6 percent on an actual basis and 2.1 percent on a pro forma basis. Second quarter rental revenue for the company’s specialty segment, Trench, Power and Fluid Solutions increased 44.8 percent year over year, including an organic increase of 12.6 percent.
For the first six months of the year, equipment rental revenue was $3.755 billion, compared to $3.090 billion for the first six months of 2018, a 21.5–percent jump. Total revenue for six months was $4.407 billion compared to $3.625 billion a year ago, a 21.6–percent leap.
Based in Stamford, Conn., United Rentals is No. 1 on the RER 100.