United Rentals has reported their financial results for the first quarter of 2021, including a total revenue of $2.057 billion and rental revenue1 of $1.667 billion. The equipment rental revenue was $1.783 million in the first quarter of 2020, equaling a 6.5-percent decrease. However, the year-over-year change in rental revenue improved each month in the quarter, and March was positive year-over-year.
The general rentals segment had an 8.7 percent year-over-year decrease in rental revenue to $1.273 billion for the quarter, and the rental gross margin increased by 20 basis points to 32.3 percent. The rental revenue of the specialty rentals segment, or Trench, Power and Fluid Solutions, increased 1.3 percent year-over-year to $394 million for the quarter, and the rental gross margin increased by 50 basis points to 42.1 percent, mainly due to decreases in temporary labor and fleet repair costs.
Matthew Flannery, CEO, United Rentals, said, “We were very pleased with our first quarter results and the strong start to our year, as our key end-markets continue to rebound from the challenges of 2020. Sentiment among our customers continues to improve, and we are well prepared to support them as we enter the busiest part of our season.”
He continued, “The recovery that we’ve seen since the middle of last year remains evident across our business, and virtually all indicators point to these trends continuing. As such, we are raising our full-year guidance to reflect our expectations for stronger growth in our core rental business and increased used equipment sales. Most importantly, we are leveraging our significant competitive advantages to add value for both our customers and our investors.”
In related statistics, the used equipment sales in the quarter increased 28 percent year-over-year, reflecting a strong used equipment market. Used equipment pricing rose for the second consecutive quarter, with used equipment proceeds in the quarter being 49 percent of original equipment cost (OEC), compared to 53 percent in the year-ago period.
Recently, United Rentals acquired Franklin Equipment, a rental company headquartered in Ohio. And in April, United agreed to acquire General Finance, a mobile storage rental specialist, with the acquisition expected to close during the second quarter. United has updated its full-year outlook, including the contribution from the acquisition of Franklin Equipment, but not including the impact of the pending acquisition of General Finance Corp. The previous expectation for total revenue in 2021 was in the range of $8.625 to $9.025 billion. Now the company is expecting revenue within the range of $9.05 billion to $9.45 billion.
Information provided by United Rentals and edited by Alexis Brumm.
1. Rental revenue includes owned equipment rental revenue, re-rent revenue and ancillary revenue