United Rentals Inc. announced financial results for the first quarter 2016, reporting a decrease in owned equipment rental revenue of 1.0% year-over-year, reflecting a 2.8% drop in rental rates. This was offset by an increase of 2.7% in the volume of equipment on rent, which included the adverse impact from currency.
Total revenue was $1.310 billion and rental revenue was $1.117 billion for the first quarter, compared with $1.315 billion and $1.125 billion, respectively, for the same period last year. On a GAAP basis, the company reported first quarter net income of $92 million, or $1.01 per diluted share, compared with $115 million, or $1.16 per diluted share, for the same period last year1.
Adjusted EPS2 for the quarter was $1.40 per diluted share, compared with $1.34 per diluted share for the same period last year. Adjusted EBITDA2 was $584 million and adjusted EBITDA margin was 44.6%, reflecting decreases of $18 million and 120 basis points, respectively, from the same period last year.
Michael Kneeland, chief executive officer of United Rentals, said, "During the first quarter we saw broad-based, improving demand in many of our core markets, which was most apparent in accelerating volume. On the other hand, we continue to face significant headwinds from oil and gas and from our Canadian business, pressuring rental rates. We are encouraged, however, by industry data that shows that fleet supply-demand dynamics are moving towards equilibrium in the U.S."
Kneeland continued, "Based on what we see and hear in the marketplace, we continue to expect our business to improve both seasonally and cyclically, with our updated guidance reflecting the net impact of weaker rental rates due primarily to what we believe are temporary factors. Our business is larger, more diverse and more operationally effective than it has ever been, and we have the tools to maintain our industry leadership and financial strength, including significant flexibility to manage both our costs and capital plans in any environment. We remain confident in our ability to generate at least $900 million of free cash flow and then to redeploy this capital in an optimal manner."
