The share price of
United Rentals, Inc.
) went up 2.1% as the company reported a 25% year-over-year
increase in its fourth-quarter 2013 adjusted earnings of $1.59
per share. The reported figure also outperformed the Zacks
Consensus Estimate of $1.45.
GAAP earnings (including RSC merger related costs as well as
restructuring and asset impairment charges) came in at $1.31 per
share, compared with the prior-year quarter earnings of 40 cents
Total revenue improved 7% year over year to $1.338 billion in
the quarter. The year-over-year rise was mainly due to growth in
both equipment rentals (9.4%) and sales of new equipment (3%),
partly offset by decline in sale of rental equipment (5%).
Revenues beat the Zacks Consensus Estimate of $1.331 billion.
Cost of sales increased 2% to $771 million from $754 million
in the year-ago quarter. Gross profit improved 15% year over year
to $567 million. Consequently, gross margin expanded 160 basis
points (bps) to 43% in the quarter.
Selling, general and administrative expenses went down 7% year
over year to $163 million. Adjusted operating profit rose 27% to
$404 million in the quarter. Operating margin increased 470 bps
to 30.2% in the quarter.
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) in the reported quarter improved 18% to
$651 million from $553 million in the year-ago quarter. Adjusted
EBITDA margin was 48.7% in the quarter, rising 440 bps from the
Time utilization increased 60 bps year over year to 69.3% in
the quarter. The size of the rental fleet was $7.73 billion as of
fiscal 2013 end, compared with $7.23 billion at 2012-end.
Revenues in the General Rentals segment increased 8.7% over
year to $1,045 million in the reported quarter. Gross profit for
the segment increased 15.1% to $451 million from $392 million in
the year-ago quarter.
The Trench Safety, Power & HVAC segment's revenues climbed
17% to $88 million in the quarter from $75 million in the
year-ago quarter. Gross profit for the segment improved 11% to
$39 million from $35 million in the prior-year quarter.
Fiscal 2013 Performance
For fiscal 2013, United Rentals reported adjusted earnings per
share of $4.91, up 31% from $3.76 in fiscal 2012. Including
one-time items, earnings per share was $3.64 compared with 79
cents earned in the prior fiscal. Revenues increased 20% year
over year to $4.9 billion. Time utilization increased 70 bps to a
company record 68.2% in fiscal 2013.
Cash and cash equivalents were $175 million as of Dec 31,
2013, compared with $106 million as of Dec 31, 2012. Long-term
debt was $6.57 billion as of Dec 31, 2013 versus $6.68 billion as
of Dec 31, 2012. Cash provided by operating activities was $1551
million in fiscal 2013, as against $721 million in the prior
year. For the full year 2013, free cash flow was $383 million,
compared with usage of $223 million in the prior year
In Oct 2013, United Rentals' board of directors approved a
$500-million share repurchase program. During the fourth quarter,
the company repurchased common stock worth $9 million and expects
to complete the program within 18 months.
United Rentals expects revenues in the range of $5.25 billion
to $5.45 billion in fiscal 2014. Adjusted EBITDA guidance for the
full year is projected in the range of $2.45 billion-$2.55
billion. The company expects an increase in rental rates of
approximately 4.0% year over year and ime utilization of around
Net rental capital expenditures is planned at approximately
$1.15 billion, after gross purchases of approximately $1.65
billion; and the company expects free cash flow in the range of
$400 million to $450 million. Fiscal 2013 was a record year for
United Rentals on all grounds: revenues, EBITDA, EBITDA margin
Greenwich, Conn.-based United Rentals is the largest equipment
rental company in the world, with an integrated network of 832
rentals. The company offers leases on about 3,100 classes of
equipment with total original cost of $7.73 billion.
United Rentals currently carries a Zacks Rank #2 (Buy).
Some other stocks worth considering in the sector include
). While Cardtronics and Rentrak sport a Zacks Rank #1 (Strong
Buy), PFSweb has a Zacks Rank #2 (Buy).
CARDTRONICS INC (CATM): Free Stock Analysis
PFSWEB INC (PFSW): Free Stock Analysis Report
RENTRAK CORP (RENT): Free Stock Analysis
UTD RENTALS INC (URI): Free Stock Analysis
To read this article on Zacks.com click here.