We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the last reported quarter, United Rentals’ adjusted earnings and revenues topped the Zacks Consensus Estimate by 7% and 3.5%, respectively. This largest equipment rental company’s second-quarter 2023 adjusted earnings and revenues grew 25.7% and 28.3% year over year, respectively.
Markedly, its earnings surpassed expectations in two of the trailing four quarters and missed on other two occasions, with the average surprise being 1.1%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share (EPS) has remained unchanged at $11.32 over the past 60 days. The estimated figure indicates 22.1% growth from the year-ago EPS of $9.27. The consensus mark for revenues is $3.68 billion, suggesting a 20.6% year-over-year improvement.
United Rentals' third-quarter performance is expected to mirror continued demand in its end markets and the robustness of its fundamental rental operations. Higher pricing and improved activity level, backed by stronger demand in each of the end markets served in North America (industrial and other non-construction and commercial construction), are expected to have aided United Rentals’ third-quarter results.
Notably, federally funded infrastructure projects, industrial manufacturing, energy and power activities are expected to have benefited the company’s quarterly results. The company’s quarterly results are likely to have benefited from solid mega-project activity. URI’s solid exposure to blue-chip engineering & construction accounts and industry-leading market share are expected to have reflected in its quarterly performance. Furthermore, acquisitions are expected to have helped United Rentals to boost the top line in the quarter to be reported.
The company’s investment in the General Rental segment (wherein the primary growth drivers are non-residential construction and plant maintenance) also bodes well. Overall, industrial markets are expected to have aided the company’s performance.
Equipment Rentals revenues (which accounted for 86.9% of its total revenues in 2022) are expected to have registered growth in the to-be-reported quarter. Our model predicts Equipment Rentals revenues to increase 14.1% to $3,117.9 million in the third quarter from a year ago.
Our model predicts Sales of Rental Equipment to grow 107.1% to $374.9 million from the year-ago reported figure.
New Equipment sales suggest an increase of 58.7% year over year. The contractor supplies sales indicate 17.3% growth from the prior year. Service and other revenues suggest 15% growth on a year-over-year basis.
Overall, the company’s General Rentals revenues are expected to grow 24.2% to $2,724.1 million in the quarter from the year-ago period. On the other hand, the Specialty segment is expected to have registered 9.8% growth to $942.2 million in the third quarter from a year ago.
From the margin perspective, supply-chain disruptions and higher inflation might be causes of concern. The consolidated operating margin is expected to decline to 27.1% in the quarter from 30.2% a year ago.
We expected adjusted EBITDA for the quarter to grow 16.7% year over year to $1,774.9 million. Adjusted EBITDA margin, however, is expected to decline 50 basis points to 48.4%.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for United Rentals for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here, as you will see below.
Earnings ESP: United Rentals has an Earnings ESP of -4.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: URI currently carries a Zacks Rank #3.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector which, according to our model, have the right combination of elements to post an earnings beat on their quarters to be reported.
OC’s earnings for the to-be-reported quarter are expected to grow 5.9%. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 18.2%.
Construction Partners, Inc. (ROAD - Free Report) has an Earnings ESP of +2.91% and sports a Zacks Rank #1.
ROAD’s earnings topped the consensus mark in three of the last four quarters, with the average being 10.6%. Earnings for the to-be-reported quarter are expected to rise 108% year over year.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +2.07% and carries a Zacks Rank #3.
LPX’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 95.8%. Earnings for the to-be-reported quarter are expected to decline 19.2% year over year.
Image: Bigstock
United Rentals (URI) to Report Q3 Earnings: What's in Store?
United Rentals, Inc. (URI - Free Report) is scheduled to report third-quarter 2023 results on Oct 25, after market close.
In the last reported quarter, United Rentals’ adjusted earnings and revenues topped the Zacks Consensus Estimate by 7% and 3.5%, respectively. This largest equipment rental company’s second-quarter 2023 adjusted earnings and revenues grew 25.7% and 28.3% year over year, respectively.
Markedly, its earnings surpassed expectations in two of the trailing four quarters and missed on other two occasions, with the average surprise being 1.1%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share (EPS) has remained unchanged at $11.32 over the past 60 days. The estimated figure indicates 22.1% growth from the year-ago EPS of $9.27. The consensus mark for revenues is $3.68 billion, suggesting a 20.6% year-over-year improvement.
United Rentals, Inc. Price and EPS Surprise
United Rentals, Inc. price-eps-surprise | United Rentals, Inc. Quote
Factors to Note
United Rentals' third-quarter performance is expected to mirror continued demand in its end markets and the robustness of its fundamental rental operations. Higher pricing and improved activity level, backed by stronger demand in each of the end markets served in North America (industrial and other non-construction and commercial construction), are expected to have aided United Rentals’ third-quarter results.
Notably, federally funded infrastructure projects, industrial manufacturing, energy and power activities are expected to have benefited the company’s quarterly results. The company’s quarterly results are likely to have benefited from solid mega-project activity. URI’s solid exposure to blue-chip engineering & construction accounts and industry-leading market share are expected to have reflected in its quarterly performance. Furthermore, acquisitions are expected to have helped United Rentals to boost the top line in the quarter to be reported.
The company’s investment in the General Rental segment (wherein the primary growth drivers are non-residential construction and plant maintenance) also bodes well. Overall, industrial markets are expected to have aided the company’s performance.
Equipment Rentals revenues (which accounted for 86.9% of its total revenues in 2022) are expected to have registered growth in the to-be-reported quarter. Our model predicts Equipment Rentals revenues to increase 14.1% to $3,117.9 million in the third quarter from a year ago.
Our model predicts Sales of Rental Equipment to grow 107.1% to $374.9 million from the year-ago reported figure.
New Equipment sales suggest an increase of 58.7% year over year. The contractor supplies sales indicate 17.3% growth from the prior year. Service and other revenues suggest 15% growth on a year-over-year basis.
Overall, the company’s General Rentals revenues are expected to grow 24.2% to $2,724.1 million in the quarter from the year-ago period. On the other hand, the Specialty segment is expected to have registered 9.8% growth to $942.2 million in the third quarter from a year ago.
From the margin perspective, supply-chain disruptions and higher inflation might be causes of concern. The consolidated operating margin is expected to decline to 27.1% in the quarter from 30.2% a year ago.
We expected adjusted EBITDA for the quarter to grow 16.7% year over year to $1,774.9 million. Adjusted EBITDA margin, however, is expected to decline 50 basis points to 48.4%.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for United Rentals for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here, as you will see below.
Earnings ESP: United Rentals has an Earnings ESP of -4.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: URI currently carries a Zacks Rank #3.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector which, according to our model, have the right combination of elements to post an earnings beat on their quarters to be reported.
Owens Corning (OC - Free Report) has an Earnings ESP of +1.56% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
OC’s earnings for the to-be-reported quarter are expected to grow 5.9%. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 18.2%.
Construction Partners, Inc. (ROAD - Free Report) has an Earnings ESP of +2.91% and sports a Zacks Rank #1.
ROAD’s earnings topped the consensus mark in three of the last four quarters, with the average being 10.6%. Earnings for the to-be-reported quarter are expected to rise 108% year over year.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +2.07% and carries a Zacks Rank #3.
LPX’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 95.8%. Earnings for the to-be-reported quarter are expected to decline 19.2% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.