United Rentals’ specialty business was robust in the first quarter, led by the company’s power and HVAC business, CEO Matthew Flannery told a conference call of investors last week. Flannery said United is continuing to invest in growing its specialty network with six cold starts already year-to-date and another 24 specialty branches planned for this year.
Flannery said the first quarter looked uncertain as 2020 ended, but the company’s operating conditions and its performance improved faster than expected.
“We gained back a lot of the ground on rental revenue, narrowing the decline from 2020, and we exited the quarter up year over year in March,” Flannery said. “Our customers are also optimistic. They’re gaining more visibility and they’re turning to us for the equipment they need.”
Flannery noted that just a few months into 2021, the company has absorbed almost all of the excess fleet it had in 2020.
“And we took advantage of a healthy used equipment market driving record retail sales to generate almost 30 percent more proceeds in the quarter than we did a year ago,” Flannery said.
Flannery expressed reasons to be optimistic for the rest of the year.
“Customer sentiment continues to trend up in our surveys, as a majority of our customers expect to see growth over the next 12 months,” he said. “And importantly, the percent of customers who feel this way has climbed back to pre-pandemic levels. We think there are a few reasons for this. For one thing, our customers have a significant amount of work in hand. And they can also see that our project activity is continuing to recover. The vaccines are rolling out, restrictions are easing in most markets, and the weather is turning warmer, three positive dynamics converging right before a busy season.
“Also, we're seeing the return of activity in the manufacturing sector after more than a year of industrial recession. And the construction verticals that have been most resilient throughout COVID are still going strong, areas that we've discussed, like technology and data centers, power, healthcare, and warehousing and distribution."
Flannery also is optimistic about prospects for federal investment into infrastructure.
“Our customers are encouraged that it's back on the table in Washington,” he noted. “Most of the infrastructure categories and the administration's current proposal are directly in our wheelhouse, things like bridges, airport, and clean energy. Almost any infrastructure spending will benefit us in the long-term both directly and indirectly.”
Flannery said the company will continue to keep its antennas turned to possible merger and acquisition activity to add to its recent acquisition of 20-location Franklin Equipment and its not-yet-finalized purchase of General Finance Corp., a leader in mobile storage and modular office rentals.
To read more on United Rentals’ first quarter results, go to: https://www.rermag.com/rental-news/article/21162656/united-rentals-total-revenue-drops-32-percent-in-first-quarter
