Research Desk Line-up: CAI Intl. Post Earnings Coverage
LONDON, UK / ACCESSWIRE / October 23, 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 release of its third quarter fiscal 2017 operating results on October 18, 2017. The equipment rental Company outperformed top- and bottom-line expectations and also raised its guidance for the fiscal year. 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 CAI International, Inc. (NYSE: CAI) for due-diligence and potential coverage as the Company reported on October 19, 2017, its financial results for Q3 2017. Register for a free membership today, and be among the early birds that get access to our report on CAI Intl. when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on URI; also brushing on CAI. With the links below you can directly download the report of your stock of interest free of charge at:
For the three months ended September 30, 2017, United Rentals' total revenue was $1.77 billion, up 17% compared with total revenue of $1.51 billion for Q3 2016. The Company's revenue number surpassed analysts' estimates of $1.71 billion.
During Q3 2017, United Rentals' adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) was $879 million and adjusted EBITDA margin was 49.8%, reflecting increases of $132 million and 30 basis points, respectively, from the year-ago corresponding period.
On a GAAP basis, United Rentals reported net income of $199 million, or $2.33 per diluted share, for Q3 2017 compared to net income of $187 million, or $2.16 per diluted share, for Q3 2016. The Company's adjusted EPS for the reported quarter was $3.25 per diluted share, up 26%, compared to $2.58 per diluted share for the year-ago same period. The results came in ahead of Wall Street's estimates for earnings of $3.00.
During Q3 2017, the Company's rental revenue was $1.54 billion, up 16.2% compared to rental revenue of $1.32 billion for Q3 2016. United Rentals' pro-forma rental revenue increased 8.9% on a y-o-y basis, reflecting growth of 7.6% in the volume of equipment on rent and a 0.9% increase in rental rates. Within rental revenue, United Rentals' owned equipment rental revenue increased 15.8%, reflecting increases of 18.2% in the volume of equipment on rent and 0.1% in rental rates.
During Q3 2017, United Rentals' time utilization increased 160 basis points y-o-y to 71.9%, a third-quarter record, with each month in the reported quarter also establishing a new monthly record. On a pro-forma basis, the Company's time utilization increased 180 basis points on a y-o-y basis.
For Q3 2017, United Rentals' Trench, Power, and Pump specialty segment's rental revenue increased by 32.9% y-o-y, primarily on a same-store basis, while the segment's rental gross margin improved by 280 basis points to 54.8%.
During Q3 2017, United Rentals generated $139 million of proceeds from used equipment sales at a GAAP gross margin of 39.6% and an adjusted gross margin of 56.8% compared to $112 million at a GAAP gross margin of 39.3% and an adjusted gross margin of 46.4% for Q3 2016. The y-o-y increase in adjusted gross margin primarily reflected the impact of sales of NES equipment.
Free Cash Flow and Fleet Size
For the first nine months of 2017, United Rentals' net cash provided by operating activities was $1.77 billion and free cash flow was $582 million. For the first nine months of 2016, the Company's net cash provided by operating activities was $1.63 billion and free cash flow was $846 million.
United Rentals' size of the rental fleet was $10.76 billion of original equipment cost (OEC) at September 30, 2017, compared to $8.99 billion at December 31, 2016. The Company's age of the rental fleet was 46.3 months on an OEC-weighted basis at September 30, 2017, compared to 45.2 months at December 31, 2016.
Return on Invested Capital
For the 12 months ended September 30, 2017, United Rentals' return on invested capital was 8.6%, an increase of 30 basis points from the 12 months ended September 30, 2016. The Company's return on invested capital (ROIC) metric uses after-tax operating income for the trailing 12 months divided by average stockholders' equity, debt, and deferred taxes, net of average cash. When adjusting the denominator to also exclude average goodwill, United Rentals' ROIC was 11.5% for the 12 months ended September 30, 2017, an increase of 30 basis points from the 12 months ended September 30, 2016.
Share Repurchase Program
United Rentals announced that it will resume its pre-existing $1 billion program to repurchase shares of its common stock. The Program commenced in November 2015 and was paused in October 2016 as the Company evaluated potential acquisition opportunities. United Rentals has already completed $627 million of repurchases under the Program, and intends to complete the remaining $373 million in 2018.
For FY17, United Rentals is forecasting total revenues in the range of $6.525 billion to $6.625 billion compared to the prior range of $6.25 billion to $6.40 billion. The Company's adjusted EBITDA is projected to be between $3.10 billion and $3.15 billion compared to the previous announcement of $2.95 billion to $3.025 billion.
United Rentals' net cash provided by operating activities is expected in the range of $2.275 billion to $2.375 billion, and free cash flow is expected in the range of $925 million to $975 million versus the earlier guidance in the band of $825 million to $925 million. United Rentals' raised it's 2017 gross CapEx plan by up to $200 million.
At the closing bell, on Friday, October 20, 2017, United Rentals' stock ended the trading session flat at $144.40. A total volume of 2.52 million shares have exchanged hands, which was higher than the 3-month average volume of 1.38 million shares. The Company's stock price skyrocketed 21.97% in the last three months, 27.16% in the past six months, and 82.48% in the previous twelve months. Moreover, the stock soared 36.77% since the start of the year. The stock is trading at a PE ratio of 20.49 and currently has a market cap of $12.21 billion.
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