United Rentals reports record first-quarter utilization at 62.4 percent, a factor which helped reduce the company's net losses to $20 million, half the amount for the same period last year.
The company also shows a 9.4% increase in revenues to $523 million for the period, while rental revenues rose by 14.2% to $434 million, according to company reports.
"We have started the year with a very solid performance that includes rate improvement in all operating regions and record first quarter time utilization, as well as stronger gross margins on every major revenue stream," says Michael Kneeland, chief executive officer of United Rentals. "Once again we outpaced our end markets with significant rental revenue growth at a very early stage in the recovery. As demand for our services increases, we are focused on attaining the optimal balance of rate and utilization to drive returns."
Time utilization for the first quarter reached 62.4%, an increase of 6.2 percentage points from the same period last year, and a first quarter record for the company. The company has reaffirmed its outlook for an increase in time utilization for the full year of approximately 1 percentage point.
Rental revenue increased 14.2%, reflecting year-over-year increases of 4.2% in rental rates and 12.8% in the volume of equipment on rent. The company has reaffirmed its outlook for an increase in rental rates of at least 5% for the full year.
The company generated $32 million of proceeds from used equipment sales at a gross margin of 43.8%, compared with $35 million of proceeds at a gross margin of 31.4% for the same period last year.
For the first quarter 2011, free cash flow was $70 million, after total rental and non-rental capital expenditures of $120 million. By comparison, free cash flow for the first quarter 2010 was $99 million after total rental and non-rental capital expenditures of $54 million. Free cash flow for the first quarter 2010 included the receipt of a $55 million federal tax refund. The company has reaffirmed its outlook for full year 2011 free cash flow generation in the range of $10 million to $50 million.
The size of the rental fleet was $3.85 billion of original equipment cost at March 31, 2011, compared with $3.79 billion at December 31, 2010. The age of the rental fleet was 48.2 months on a unit-weighted basis at March 31, 2011, compared with 47.7 months at December 31, 2010.
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