United Rentals Inc. announced financial results for the third quarter 2015, reporting rental revenue increasing 0.8% year-over-year. Within rental revenue, owned equipment rental revenue increased 1.0%, reflecting a year-over-year increase of 2.4% in the volume of equipment on rent, partially offset by a 0.1% decrease in rental rates.
Michael Kneeland, chief executive officer of United Rentals, said, "The third quarter unfolded much as we had anticipated. We delivered a robust performance in our Trench Safety and Power & HVAC businesses, aided by cross-selling. As expected, we saw rate and time pressure on our general rental business from the continued impact of upstream oil and gas activity and a weak Canadian dollar. We ran our operations with great cost discipline in this environment, generating solid financial results and strong free cash flow. Our EBITDA margin, at over 50%, was the highest of any quarter in our company’s history."
Kneeland continued, "Based on our year-to-date performance, and our visibility into fourth quarter, we’ve reaffirmed our full-year outlook for 2015. We’re now in the midst of planning for 2016, which we believe will be another solid year of industry growth. This is supported by customer optimism and industry forecasts for 2016 and several years beyond. All of these factors, as well as the timing of current headwinds, will shape how we manage capex, rates and utilization in the coming year."
Third Quarter 2015 Highlights
• Rental revenue (which includes owned equipment rental revenue, re-rent revenue and ancillary items) increased 0.8% year-over-year.3 Within rental revenue, owned equipment rental revenue increased 1.0%, reflecting a year-over-year increase of 2.4% in the volume of equipment on rent, partially offset by a 0.1% decrease in rental rates.
• The company’s Trench Safety and Power & HVAC businesses' rental revenue increased by a combined 17.9% year-over-year, primarily on a same store basis.
• Return on invested capital was 8.9% for the 12 months ended September 30, 2015, an increase of 0.5 percentage points from the 12 months ended September 30, 2014.
• Time utilization decreased 150 basis points year-over-year to 70.0%. Excluding the branches with the most exposure to upstream oil and gas, time utilization decreased 60 basis points year-over-year.