United Rentals (URI) Tops Q2 EPS by $1.82, Revenues Beat; Provides FY20 Revenue Outlook

United Rentals (NYSE: URI) reported Q2 EPS of $3.68, $1.82 better than the analyst estimate of $1.86. Revenue for the quarter came in at $1.94 billion versus the consensus estimate of $1.83 billion.

Second Quarter 2020 Highlights

• Total revenue of $1.939 billion, including rental revenue1 of $1.642 billion.
• Fleet productivity2 decreased 13.6% year-over-year, reflecting the impact of COVID-19 on volumes; trends improved through the quarter with OEC-on-Rent at the end of June almost 14% above its April trough.
• Net income of $212 million with net income margin3 of 10.9%. GAAP diluted earnings per share of $2.93, and adjusted EPS3 of $3.68.
• Adjusted EBITDA3 of $899 million, with adjusted EBITDA margin3 of 46.4%, aided by aggressive cost management.
• $817 million of net cash from operating activities; free cash flow4 of $817 million, including gross rental capital spending of $145 million.
• Total liquidity at June 30, 2020 of $3.823 billion.

CEO Comment

Matthew Flannery, chief executive officer of United Rentals, said, “We’re pleased with our second quarter results, which reflect both the flexibility and resiliency of our business model. Our employees did an outstanding job of executing our cost initiatives, while helping our customers operate safely in the midst of the pandemic. I’m inspired by our team’s commitment to our company and the communities we serve.”

Flannery continued, “We saw a steady recovery in volume beginning in mid-April, which gave us good momentum into the start of our busy season. While visibility is still limited, near-term indicators suggest that the second half of 2020 may track to seasonal patterns in the majority of our markets. Based on this, we have reintroduced guidance. Should things change, our continued focus on cost and capital discipline, along with our strong balance sheet and robust cash generation, will allow us to respond swiftly.”

GUIDANCE:

United Rentals sees FY2020 revenue of $8.05-8.45 billion, versus the consensus of $8.22 billion.

For earnings history and earnings-related data on United Rentals (URI) click here.

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