United Rentals stock gets battered despite Q3 earnings beat

The biggest equipment rental company, United Rentals (URI), on Wednesday beat estimates for earnings and revenue estimates for the third quarter, but after-hours trading saw the stock get battered.

United Rentals revenue jumped 18.4% to $2.11 billion for the quarter, earning $4.01 per diluted share. According to estimates, earnings was forecast to jump 48% to $3.50 per share, while revenue moves 13% higher to $1.8 billion from a year ago.

Earlier today, trading closed at $155.64, up 2.1%. But stock fell sharply 2.6% after results announcement. Rivals Caterpiller (CAT) and John Deere (DE) inched 1.6% and 0.9% higher respectively.

OUTLOOK: Setting aside the impact of the BlueLine takeover, United Rentals lifted its FY 2018 target midpoint to $7.6 billion from $7.45 billion.

Over the past five quarters – including this third quarter, United has missed estimates only once.

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 early September, United Rentals had announced that it would buy BlueLine from Platinum Equity for about $2.1 billion in cash., with the transaction expected to close by the fourth quarter.

BlueLine is one of the ten largest equipment rental companies in North America, which generated an estimated $313 million of adjusted EBITDA at a 39.8% margin on $786 million of total revenue for the trailing 12 months ended August 31, 2018.

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