United Rentals Shares Up 2% As Q4 Results Top Estimates

(RTTNews) - Equipment rental company United Rentals, Inc. (URI) reported Wednesday a profit for the fourth quarter that increased from last year, reflecting double-digit revenue growth amid increases in rental rates and rental volumes. Adjusted earnings per share and quarterly revenues topped analysts' expectations.

The Greenwich, Connecticut-based company reported net income of $194 million or $1.88 per share for the fourth quarter, higher than $140 million or $1.31 per share in the prior-year quarter.

Results for the latest quarter primarily include merger related intangible asset amortization of $0.30 per share, while the prior year included $0.24 per share of the same charge.

Excluding items, adjusted earnings for the quarter was $2.19 per share, compared to $1.59 per share in the year-ago quarter.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $2.07 per share for the quarter. Analysts estimate typically exclude special items.

Total revenues for the quarter increased to $1.56 billion from $1.34 billion in the same quarter last year, and topped fourteen Wall Street analysts' consensus estimate of $1.52 billion by a whisker.

Equipment rental revenues grew 16.5 percent from last year to $1.32 billion, with owned equipment rental revenue increasing 16.3 percent, reflecting year-over-year increases of 10.7 percent in volume of equipment on rent and 4.1 percent in rental rates. Time utilization also improved 130 basis points year-over-year to 70.6 percent.

Excluding the impact of National Pump, rental revenue for the quarter increased only 11.1 percent.

"We met or exceeded every target in our outlook for 2014, ending the year with a better-than-expected quarter and our highest return yet on invested capital," CEO Michael Kneeland said in a statement.

Looking ahead to fiscal 2015, United Rentals expects revenues between $6.0 billion to $6.20 billion. Street is currently looking for full-year 2015 revenues of $6.16 billion.

The company also expects rental capital expenditures in 2015 to be about $1.2 billion.

"For 2015, we are guiding to record highs of over $6 billion in revenue and approximately $3 billion in adjusted EBITDA. Our industry is forecast to have multiple years of growth ahead, and our customers are upbeat," Kneeland added.

The company noted that it believes the low oil prices will be a boon to many sectors it serves, spurring demand in manufacturing and other markets hungry for its fleet.

URI closed Wednesday's regular trading session at $87.56, up $3.09 or 3.66% on a volume of 4.27 million shares. The stock gained a further $1.31 or 1.50% in after-hours trading.