Categories Analysis, Earnings, LATEST, Other Industries

Earnings Preview: Higher rental rates to give United Rentals a lift in Q3

United Rentals Inc. (URI) is scheduled to report third quarter 2018 earnings results on Wednesday, October 17. Analysts expect the company to report $2.02 billion in revenues, reflecting a year-over-year growth of 14.4%. Earnings for the quarter are expected to grow 42.2% to $4.62 per share.

In prior sequential quarter, United topped market expectations on revenues and profits. Revenues grew 18% to $1.89 billion while EPS jumped 62% to $3.85.

The results had benefited from higher rental equipment volume and rental rates, along with tax benefits. Double-digit increases in rental revenues fueled revenue growth.

This trend is likely to continue for the third quarter due to solid demand in the industrial and construction spaces. Rental rates have remained positive so far this year and are likely to maintain this momentum in the third quarter as well.

Over the past four quarters, United has missed estimates only once. So going by the company’s history, it has a good chance of beating expectations in Q3.

United Rentals posts upbeat Q2 results

At the end of July, United completed its acquisition of BakerCorp for around $715 million and updated its guidance to reflect the transaction. Total revenue is now expected to range between $7.6 billion and $7.8 billion while adjusted EBITDA is expected to range between $3.71 billion and $3.81 billion.

In September, United announced its plan to acquire equipment rental company BlueLine Rental for approx. $2.1 billion. The addition of BlueLine will provide United with significant benefits in terms of footprint, fleet and customer base. The acquisition, which is expected to close in the fourth quarter of 2018, is anticipated to be immediately accretive to United’s EPS and free cash flow.

United plans to update its full-year 2018 guidance once again after completing the BlueLine acquisition. Updates on both these acquisitions will be something to note during the third quarter earnings announcement.

United’s industry peers PulteGroup Inc. (PHM) and The Sherwin-Williams Company (SHW) are expected to report earnings results next week on October 23 and 25, respectively.

United’s shares are down 20% thus far this year and looking at the past three months, the stock is down 11%. If the third quarter results beat expectations, the stock is likely to get a lift. The general sentiment around the results appear to be positive.

Get access to timely and accurate verbatim transcripts that are published within hours of the event.

Most Popular

AVGO Earnings: All you need to know about Broadcom Q1 2021 earnings results

Broadcom Limited (NASDAQ: AVGO) reported first quarter 2021 earnings results today. Total revenue increased 14% year-over-year to $6.65 billion. GAAP net income was $1.3 billion, or $3.05 per share, compared

Infographic: Costco (COST) Q2 2021 sales up 15%; earnings miss

Retail giant Costco Wholesale Corporation (NASDAQ: COST) reported higher earnings and revenues for the second quarter of 2021. Earnings missed analysts’ expectations, while sales beat. Net profit was $951 million

Will shifting to as-a-service model help Hewlett Packard in emerging stronger from COVID?

With the corporate world rapidly shifting to cloud-native computing after the virus outbreak changed work culture and the way businesses operate, technology providers are aggressively innovating their offerings. Hewlett Packard

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top