United Rentals' first-quarter earnings climbed 62% as the company's revenue continued to strengthen. The company reported a profit of $21 million, up from $13 million a year earlier. Revenue jumped 68% to $1.1 billion, just shy of the $1.11 billion estimate from analysts.
Rental revenue increased 5.4%. Within rental revenue, owned equipment rental revenues increased 7.3%, reflecting year-over-year increases of 5.8% in the volume of equipment on rent and 5.4% in rental rates.
Adjusted EBITDA was $451 million and adjusted EBITDA margin was 41.0%, an increase of $59 million and 420 basis points, respectively, from the same period last year. The company has reaffirmed its outlook for full-year adjusted EBITDA in a range of $2.25 billion to $2.35 billion.
Other highlights in the first-quarter report:
- Time utilization increased 30 basis points year-over-year to 64.2%. The company has reaffirmed its outlook for full-year time utilization of approximately 68.0%.
- The company generated $123 million of proceeds from used equipment sales at a gross margin of 43.9%, compared with $125 million of proceeds at a gross margin of 39.2% for the same period last year.
- The company realized cost synergies of $53 million in the quarter from the RSC integration, and reaffirmed its fully developed goal of $230 million to $250 million of cost synergies on a run-rate basis.
- Flow-through, which represents the year-over-year change in adjusted EBITDA divided by the year-over-year change in total revenue, was 163.9%.
Michael Kneeland, chief executive officer of United Rentals, said, "Our first quarter performance has given us a strong start to a pivotal year. Revenue, rates and time utilization all met or exceeded our expectations, and our adjusted EBITDA margin of 41% was a first quarter record for us. We remain solidly on track for a year of disciplined growth, including a rental rate increase of 4.5% on total revenue of approximately $5 billion."
He continued, "As our end markets recover, we have an opportunity to gain ground where it will be most profitable: with key accounts of all types and specialty rentals. We plan to expand our sales force by at least 10% this year to capitalize on over a billion dollars of net fleet purchases. At the same time, we'll continue to drive cost efficiencies and further lower our debt leverage. We feel confident that our full year performance will meet our outlook and give us even greater earning power going into the next several years."