United Rentals has rebranded the newly acquired National Pump business as United Rentals Pump Solutions, CEO Michael Kneeland told a conference calls of investors following its announcement of first quarter financial results this week. Kneeland said the company’s plan is to move the pump operation onto United Rentals’ technology by the end of June and then launch a fully integrated cross-selling effort.
Kneeland said the company’s other specialty lines continue to turn in strong performances. “Same-store growth for trench safety, power and HVAC was an impressive 19 percent year over year and we’re on track to open at least 18 branches this year, including some for our new pump platform and our industrial tool business. We want to double the size of our high-margin specialty segment within five years.”
Kneeland said the company’s CapEx plan for specialty fleet is approximately $240 million, including capital for the newly named pump division. The company plans to purchase about $750 million of fleet during the second quarter as part of its full year planned expenditure of about $1.7 billion.
Kneeland also emphasized United’s strong first-quarter performance. “The first quarter is always about pushing forward against seasonal headwinds and driving year-over-year improvement, and I’m happy to say that we overcame an unusually harsh winter and generated solid numbers in every major metric,” Kneeland said.
Kneeland told the call the company is very bullish about prospects for rental for the next few years. “Last year I said that we were bullish about the impending recovery,” Kneeland told investors. “In January, we confirmed that equipment rental appears to be in the early stages of a multiyear growth cycle. And now, commercial construction, which accounts for about half our business, appears to be in a broader recovery, and as you know, commercial construction is typically the last end market to pick up steam in an upcycle. So any improvement is a positive sign.”
Kneeland said reports from the field indicate wider optimism than United has seen in years. “Our customers are upbeat about their own business prospects,” he said. “So in short, there is a widespread sense that things are back on track. The first quarter metrics support this. For one thing, our used equipment margin was more than 5 percentage points higher than the first quarter last year, and that’s another good indicator in market optimism.”
On a national basis, Kneeland said all but one of United Rentals’ regions showed revenue growth in the quarter and about half its regions had double-digit growth.
“Our Midwest and Southeast regions turned in the strongest revenue performance,” he added. “They had year-over-year increases in the range of 18 to 10 percent. And our Gulf, Mountain West and South regions were very close to the top. In the Southeast along, we won bids on the City Center complex, a power plant, a pharmaceutical plant as well as two other sports facilities and a large residential tower. We’re also seeing infrastructure projects come back on line both in the U.S. and Canada, and our industrial business continues to be robust, particularly with manufacturing and energy.”