United reports Q3 results, raises full-year guidance

United Rentals’ Q3 results show demand is now tracking to normal seasonal patterns. The world’s largest equipment rental company reported a total Q3 revenue of $2.187 billion, down -12 percent compared to last year’s $2.488 billion. For the nine months to Sept. 30, total revenues were down -10 percent this year compared to 2019 at $6.251 billion versus $6.895 billion.

Equipment rentals were down -13.3 percent at $1.861 billion from 2019’s $2.147 billion. Rental revenue included United’s owned equipment rental revenue, re-rent revenue and ancillary revenue.

In a call with investors, Matthew Flannery, chief executive officer of United Rentals, said, ”What we saw in the third quarter was a continuing recovery, albeit at a moderate pace. Our end markets are improving. And for the first quarter since Covid hit, the trends are in line with normal seasonality. That said, volumes were still down year-over-year. Near-term, we have good visibility. Market activity looks positive and customer sentiments trending up. Longer-term, we expect that future events, including a potential vaccine, are likely to have a significant impact on demand.”

Flannery continued, ”The recovery in North America has been fairly broad-based and customer sentiment continues to trend up. We see business confidence improving in our own customer surveys as well as many external indicators. Used equipment sales are another helpful indicator of demand. Our third quarter revenue from used sales was essentially flat with last year and used pricing held up as well. So demand’s holding steady and, in fact, we sold 35 percent more fleet through the retail channel in the quarter compared with third quarter last year. And that tells us that contractors are buying fleet they feel confident they can put to work.”

Fleet productivity for the quarter decreased 8 percent year-over-year, mainly due to lower rental volumes. Fleet productivity improved by 560 basis points sequentially, primarily reflecting better fleet absorption.

Flannery said, “We’re pleased with our third quarter results, particularly our cost performance and the quarter-over-quarter improvement in fleet absorption. I am incredibly proud of our team as they continue to provide outstanding support to our customers, while maintaining a strong focus on safety and disciplined execution.”

Flannery continued, “The recovery that we’ve seen since the spring has been evident in most of our markets with demand tracking to normal seasonal patterns. We expect current trends to continue and have raised our full-year 2020 outlook for revenue, profitability and free cash flow. While the pace of the recovery remains uncertain, we are encouraged by the steady improvements we are seeing. Most importantly, we remain confident in our ability to execute well under any market conditions.”

United has raised its full-year guidance from $8.05-$8.45 billion to $8.35-$8.45 billion.