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Sep 30, 2020
United Rentals Q3 2020 Earnings Report
Announced third quarter results and raised full-year guidance.
Key Takeaways
United Rentals announced strong third quarter results, driven by cost performance and improved fleet absorption, and raised its full-year 2020 guidance for revenue, profitability and free cash flow.
Total revenue of $2.187 billion, including rental revenue of $1.861 billion.
Fleet productivity decreased 8.0% year-over-year, but improved sequentially by 560 basis points.
Net income of $208 million, with GAAP diluted earnings per share of $2.87, and adjusted EPS of $5.40.
Adjusted EBITDA of $1.081 billion, implying an adjusted EBITDA margin of 49.4%.
United Rentals
United Rentals
United Rentals Revenue by Segment
Forward Guidance
The company raised its full-year 2020 outlook for revenue, profitability and free cash flow.
Positive Outlook
- Total revenue between $8.35 billion and $8.45 billion.
- Adjusted EBITDA between $3.825 billion to $3.875 billion.
- Net rental capital expenditures after gross purchases between $100 million to $150 million, after gross purchases of $900 million to $950 million.
- Net cash provided by operating activities between $2.45 billion to $2.55 billion.
- Free cash flow (excluding the impact of merger and restructuring related payments) between $2.2 billion to $2.3 billion.
Challenges Ahead
- Uncertainty regarding the length of time it will take to slow the spread of COVID-19.
- The extent to which businesses in and associated with the construction industry continue to be deemed “essential”.
- The impact of global economic conditions and public health crises and epidemics, such as COVID-19, on us, our customers and our suppliers.
- The possibility that companies that we have acquired or may acquire, could have undiscovered liabilities or involve other unexpected costs, may strain our management capabilities or may be difficult to integrate.
- The cyclical nature of our business, which is highly sensitive to North American construction and industrial activities.
Revenue & Expenses
Visualization of income flow from segment revenue to net income