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United Rentals (URI) Q4 Earnings Beat, Up Y/Y, Shares Rise

In This Article:

United Rentals, Inc.’s URI shares gained 3.65% in the after-hours trading session on Jan 26, following better-than-expected fourth-quarter 2021 results. Better fleet absorption, higher revenues and stronger pricing helped the company end 2021 on a stronger note.

With respect to 2022 guidance, Matthew Flannery, CEO of United Rentals, said, “Our 2022 guidance reflects the optimism of our customers, as well as our confidence in leveraging our competitive advantages over the longer term. Our larger, more diverse value proposition should both benefit the top line and strengthen our levers for delivering strong margins, cash generation and returns in this new upcycle.”

Inside the Headlines

Adjusted earnings of $7.39 per share topped the consensus estimate of $6.91 by 6.9%. The reported figure also increased 46.6% from the prior-year figure of $5.04 per share.

Total revenues of $2.78 billion surpassed the consensus mark of $2.76 billion by 0.6% and grew 21.8% year over year. This upside reflects broad-based recovery in activity across end-markets served.

Rental revenues increased 24.7% from the year-ago quarter to $2.31 billion. Fleet productivity was up 10.3% year over year backed by better fleet absorption.

Used equipment sales decreased 17.8% from a year ago. Adjusted gross margin of 50.3% expanded 970 basis points (bps) due to higher pricing, which marked the fifth consecutive quarter of increase. Used equipment proceeds were 60.4% of original equipment cost or OEC.

United Rentals, Inc. Price, Consensus and EPS Surprise

United Rentals, Inc. Price, Consensus and EPS Surprise
United Rentals, Inc. Price, Consensus and EPS Surprise

United Rentals, Inc. price-consensus-eps-surprise-chart | United Rentals, Inc. Quote

Segment Discussion

General Rentals: Segment equipment rentals’ revenues grew 18.6% year over year to $1.699 billion. Rental gross margin expanded 220 bps year over year to 40.2%, courtesy of a decrease in depreciation, labor and repair expense (as a percentage of revenues).

Specialty/Trench, Power and Pump: Segmental rental revenues increased 45.3% year over year to $613 million. Rentals gross margin increased 70 bps on a year-over-year basis to 45.2% due to lower depreciation and labor expenses.

Margins

The company’s total equipment rentals gross margin rose 200 bps year over year to 41.5%.

Adjusted EBITDA also grew 26.2% from the prior-year quarter to $1,309 million. Adjusted EBITDA margin expanded 170 bps to 47.2% for the quarter owing to higher margins from rental revenues and used equipment sales.

2021 Highlights

Earnings came in at $22.06 per share, reflecting an increase of 26.5% from $17.44 a year ago. Total revenues were $9.72 billion, up from $8.53 billion in 2020. Rental revenues were up 14.9% from a year ago to $8.21 billion. Fleet productivity improved 10.4% year over year for the year.