United Rentals Inc. announced financial results for the second quarter 2017, reporting a 13.5-percent increase in rental revenue year over year.
Total revenue was $1.597 billion and rental revenue was $1.367 billion for the second quarter, compared with $1.421 billion and $1.204 billion, respectively, for the same period last year. On a GAAP basis, the company reported second quarter net income of $141 million, or $1.65 per diluted share, compared with $134 million, or $1.52 per diluted share, for the same period last year.
Michael Kneeland, chief executive officer of United Rentals, said, "The broad demand we saw early this year continued throughout the second quarter as we entered our busy season. This was reflected in our strong year-over-year performance, with volume up 6.6% on a pro forma basis, record second quarter time utilization, and an improved rate trend across our business. The NES integration and Project XL are both well underway and on track."
Kneeland continued, "We remain encouraged by the level of customer activity and the industry’s ongoing absorption of fleet. Given our visibility into the balance of 2017, we’ve increased our full-year guidance for total revenue, adjusted EBITDA, capex and free cash flow. Our focus remains on balancing growth with margins, free cash flow and returns to maximize our long-term value."
Second Quarter 2017 Highlights
• Rental revenue increased 13.5% year-over-year. Within rental revenue, owned equipment rental revenue increased 13.5%, reflecting an increase of 17.4% in the volume of equipment on rent, partially offset by a 1.2% decrease in rental rates.
• Pro forma rental revenue increased 6.2% year-over-year, reflecting growth of 6.6% in the volume of equipment on rent, partially offset by a 0.4% decline in rental rates.
• Time utilization increased 190 basis points year-over-year to 69.4%, a second quarter record, with each month in the quarter also establishing a new monthly record. On a pro forma basis, time utilization increased 210 basis points year-over-year.
• The company’s Trench, Power and Pump specialty segment's rental revenue increased by 18.5% year-over-year, primarily on a same store basis, while the segment’s rental gross margin improved by 250 basis points to 49.6%.
• The company generated $133 million of proceeds from used equipment sales at a GAAP gross margin of 39.1% and an adjusted gross margin of 52.6%, compared with $134 million at a GAAP gross margin of 41.0% and an adjusted gross margin of 47.8% for the same period last year. The year-over-year decrease in GAAP gross margin and increase in adjusted gross margin primarily reflected the impact of sales of NES equipment.
