United Rentals achieves record Q3 equipment rental revenue
Fleet productivity improved 2% YoY
United Rentals’ equipment rental revenue hit a record $3.7 billion in the third quarter, as large projects and growth in key verticals, including specialty rental, bolstered performance.
The record Q3 rental revenue was up 5.8% year over year and resulted in the company raising full-year CapEx guidance as robust customer activity continues and United Rentals remains on track toward its $20 billion revenue goal by 2028, Chief Financial Officer Ted Grace said during the company’s earnings call today.
The company’s initiatives strengthen customer relationships and give United Rentals a clear edge over established competitors, directly fueling the growth, Grace added. “We would not go back and do things any differently with ancillary, and certainly, I would just say the broader inflationary environment has been worse than probably anybody expected since 2022,” he said.
United Rentals’ general rentals and specialty divisions grew, driven by an 11% year-over-year specialty revenue increase and 47 new cold starts expanding its national footprint, President and Chief Executive Matthew Flannery said during the earnings call.
“We see [increased locations] combined with the power of cross-sell and the addition of new products to our portfolio as critical points of competitive differentiation, which benefit our customers while also providing important drivers of long-term growth,” he said. “By vertical, our construction end markets saw strong growth across both infrastructure and nonresidential construction, while our industrial end markets saw particular strength within power.”
By the numbers
Stamford, Conn.-based United Rentals reported in Q3:
- Total revenue increased 5.9% YoY to $4.2 billion;
- Rental equipment sales grew 3.7% YoY to $333 million;
- New equipment sales increased 23.4% YoY to $95 million;
- Fleet productivity rose 2% YoY; and
- Net income declined 1% YoY to $701 million.
As part of the company’s rental revenue growth, ancillary and re-rent revenue grew by $69 million, an increase of more than 10%, Grace said.
NOTEWORTHY: United Rentals raised its full-year outlook, including increasing its CapEx guidance by $300 million, to a range of $4 billion to $4.2 billion and increased its total revenue guidance by $150 million to between $16 billion and $16.2 billion, as fleet demand and infrastructure remain strong, Grace said.
“We’re riding a lot more than just one wave of infrastructure,” he said. “When you think about a lot of the onshoring, a lot of the remanufacturing in the U.S. and power and other things in technology, all those come together to give us a really optimistic outlook for the foreseeable future on demand.”
MARKET REACTION: Shares of United Rentals [NYSE: URI] were down 7.79% or $77.20 from market open to $914.30 as of market close today. It has a market capitalization of $63.79 billion.
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