Research Desk Line-up: GATX Corp. Post Earnings Coverage
MAIN, GERMANY / ACCESSWIRE / July 24, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on United Rentals, Inc. (NYSE: URI), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=URI, following the Company's reporting of its second quarter fiscal 2017 earnings results on July 19, 2017. The equipment rental Company outperformed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
Get more of our free earnings reports coverage from other constituents of the Rental & Leasing Services industry. Pro-TD has currently selected GATX Corporation (NYSE: GATX) for due-diligence and potential coverage as the Company reported on July 20, 2017, its financial results for Q2 2017. Register for a free membership today, and be among the early birds that get access to our report on GATX Corp. when we publish it.
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For the three months ended June 30, 2017, United Rentals recorded total revenue of $1.60 billion compared with revenue of $1.42 billion for Q2 2016. The Company's revenue numbers surpassed analysts' expectations of $1.55 billion.
For Q2 2017, United Rentals' adjusted EBITDA was $747 million and adjusted EBITDA margin was 46.8%, reflecting an increase of $68 million and a decrease of 100 basis points, respectively, from the year ago same period.
On a GAAP basis, United Rentals reported Q2 2017 net income of $141 million, or $1.65 per diluted share, compared with $134 million, or $1.52 per diluted share, for Q2 2016. The Company's adjusted EPS for the reported quarter was $2.37 per diluted share versus $2.06 per diluted share for the prior year's comparable quarter. United Rentals' earnings numbers exceeded Wall Street's expectation of $2.31 per share.
Segment Results and Key Highlights
The Company's rental revenue was $1.37 billion for Q2 2017, up 13.5% compared with rental revenue of 1.20 billion for Q2 2016, driven by ancillaries which added $21 million on a y-o-y basis attributed to volume and partially from NES but as well as higher revenue from delivery and fuel associated with rentals. Within rental revenue, owned equipment rental revenue increased 13.5%, reflecting an increase of 17.4% in the volume of equipment on rent, partially offset by a 1.2% decrease in rental rates.
United Rentals' Trench, Power, and Pump specialty segment's rental revenue increased by 18.5% y-o-y, primarily on a same store basis, while the segment's rental gross margin improved by 250 basis points to 49.6%.
During Q2 2017, United Rentals' time utilization increased 190 basis points y-o-y to 69.4%, a second quarter record. The Company noted that each month in the reported quarter also established a new monthly record.
United Rentals' generated $133 million of proceeds from used equipment sales at a GAAP gross margin of 39.1% and an adjusted gross margin of 52.6% for Q2 2017 compared with $134 million at a GAAP gross margin of 41.0% and an adjusted gross margin of 47.8% for Q2 2016. The y-o-y drop in GAAP gross margin and increase in adjusted gross margin primarily reflected the impact of sales of NES equipment.
Free Cash Flow and Fleet Size
For H1 2017, United Rentals' net cash provided by operating activities was $1.34 billion, and free cash flow was $614 million after total rental and non-rental gross capital expenditures of $968 million. For H1 2016, net cash provided by operating activities was $1.25 billion, and free cash flow was $792 million after total rental and non-rental gross capital expenditures of $764 million. The Company's free cash flow for H1 2017 and H1 2016 included aggregate merger and restructuring related payments of $31 million and $6 million, respectively.
The size of United Rentals' rental fleet was $10.27 billion of original equipment cost ("OEC") at June 30, 2017, compared with $8.99 billion at December 31, 2016. The age of the rental fleet was 46.7 months on an OEC-weighted basis at June 30, 2017, compared with 45.2 months at December 31, 2016.
United Rentals' return on invested capital (ROIC) was 8.4% for the 12 months ended June 30, 2017, reflecting a drop of 10 basis points from the 12 months ended June 30, 2016. On an adjusted basis, the Company's ROIC was 11.3% for the 12 months ended June 30, 2017, a decrease of 20 basis points from the 12 months ended June 30, 2016.
On Friday, July 21, 2017, the stock closed the trading session at $119.31, dropping 2.64% from its previous closing price of $122.54. A total volume of 1.78 million shares have exchanged hands, which was higher than the 3-month average volume of 1.74 million shares. United Rentals' stock price skyrocketed 7.04% in the last three months, 7.30% in the past six months, and 56.47% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have surged 13.00%. The stock is trading at a PE ratio of 17.68. At Friday's closing price, the stock's net capitalization stands at $10.08 billion.
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