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In the last reported quarter, United Rentals’ adjusted earnings and revenues topped the Zacks Consensus Estimate by 3.8% and 2.8%, respectively. This largest equipment rental company’s fourth-quarter 2023 adjusted earnings and revenues grew 15.6% and 13.1% year over year, respectively.
Markedly, its earnings surpassed expectations in three of the trailing four quarters and missed on other occasions, with the average surprise being 3.1%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share (EPS) has increased to $8.35 from $8.27 over the past 30 days. The estimated figure indicates 5% growth from the year-ago EPS of $7.95. The consensus mark for revenues is $3.42 billion, suggesting a 4.1% year-over-year improvement.
United Rentals' first-quarter performance is expected to have reflected continued demand in its end markets and the robustness of its fundamental rental operations. Improved activity levels, backed by stronger demand in each of the end markets served in North America, are expected to have aided United Rentals’ first-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 83.7% of its total revenues in the fourth quarter of 2023) are expected to have registered growth in the to-be-reported quarter. Our model predicts Equipment Rentals revenues to increase 4.6% to $2,865.9 million in the first quarter from a year ago.
Our model predicts sales of Rental Equipment to decline 3.4% to $374.9 million from the year-ago reported figure.
New Equipment sales suggest an increase of 17.8% year over year. The contractor supplies sales indicate 2.1% growth from the prior year. Service and other revenues suggest 0.6% growth on a year-over-year basis.
Overall, the company’s General Rentals revenues are expected to grow 2.6% to $2,543.4 million in the quarter from the year-ago period. On the other hand, the Specialty segment is expected to have registered 7% growth to $862.5 million in the first quarter from a year ago.
Meanwhile, the consolidated operating margin is expected to expand to 22.8% in the quarter from 22.5% a year ago.
We expected adjusted EBITDA for the quarter to grow 2.4% year over year to $1,539.7 million. Adjusted EBITDA margin, however, is expected to decline 60 basis points to 45.2%.
What the Zacks Model Unveils
Our proven model predicts 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. This is exactly the case here, as you will see below.
Earnings ESP: United Rentals has an Earnings ESP of +2.71%. 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 #2.
Other Stocks Poised to Beat Earnings
Here are some companies in the Zacks Construction sector, which have the right combination of elements to post an earnings beat in the quarter to be reported.
WLDN’s earnings topped the consensus mark in three of the last four quarters and met on the remaining one occasion, with the average surprise being 886.3%. Earnings for the to-be-reported quarter are expected to have decreased 40.6% from the year-ago quarter’s reported figure.
Summit Materials, Inc. (SUM - Free Report) currently has an Earnings ESP of +28.52% and a Zacks Rank of 3.
SUM’s earnings for the to-be-reported quarter are expected to have gained 7.7% from the year-ago quarter’s reported figure. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 18.2%.
Dream Finders Homes, Inc. (DFH - Free Report) currently has an Earnings ESP of +7.14% and a Zacks Rank of 1.
DFH’s earnings for the to-be-reported quarter are expected to have increased 55.6% from the year-ago quarter’s reported figure. The company reported better-than-expected earnings in the trailing four quarters, the average surprise being 144.9%.
Image: Bigstock
Things to Consider Before United Rentals' (URI) Q1 Earnings
United Rentals, Inc. (URI - Free Report) is scheduled to report first-quarter 2024 results on Apr 24, after market close.
In the last reported quarter, United Rentals’ adjusted earnings and revenues topped the Zacks Consensus Estimate by 3.8% and 2.8%, respectively. This largest equipment rental company’s fourth-quarter 2023 adjusted earnings and revenues grew 15.6% and 13.1% year over year, respectively.
Markedly, its earnings surpassed expectations in three of the trailing four quarters and missed on other occasions, with the average surprise being 3.1%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share (EPS) has increased to $8.35 from $8.27 over the past 30 days. The estimated figure indicates 5% growth from the year-ago EPS of $7.95. The consensus mark for revenues is $3.42 billion, suggesting a 4.1% 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' first-quarter performance is expected to have reflected continued demand in its end markets and the robustness of its fundamental rental operations. Improved activity levels, backed by stronger demand in each of the end markets served in North America, are expected to have aided United Rentals’ first-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 83.7% of its total revenues in the fourth quarter of 2023) are expected to have registered growth in the to-be-reported quarter. Our model predicts Equipment Rentals revenues to increase 4.6% to $2,865.9 million in the first quarter from a year ago.
Our model predicts sales of Rental Equipment to decline 3.4% to $374.9 million from the year-ago reported figure.
New Equipment sales suggest an increase of 17.8% year over year. The contractor supplies sales indicate 2.1% growth from the prior year. Service and other revenues suggest 0.6% growth on a year-over-year basis.
Overall, the company’s General Rentals revenues are expected to grow 2.6% to $2,543.4 million in the quarter from the year-ago period. On the other hand, the Specialty segment is expected to have registered 7% growth to $862.5 million in the first quarter from a year ago.
Meanwhile, the consolidated operating margin is expected to expand to 22.8% in the quarter from 22.5% a year ago.
We expected adjusted EBITDA for the quarter to grow 2.4% year over year to $1,539.7 million. Adjusted EBITDA margin, however, is expected to decline 60 basis points to 45.2%.
What the Zacks Model Unveils
Our proven model predicts 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. This is exactly the case here, as you will see below.
Earnings ESP: United Rentals has an Earnings ESP of +2.71%. 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 #2.
Other Stocks Poised to Beat Earnings
Here are some companies in the Zacks Construction sector, which have the right combination of elements to post an earnings beat in the quarter to be reported.
Willdan Group, Inc. (WLDN - Free Report) currently has an Earnings ESP of +47.37% and has a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
WLDN’s earnings topped the consensus mark in three of the last four quarters and met on the remaining one occasion, with the average surprise being 886.3%. Earnings for the to-be-reported quarter are expected to have decreased 40.6% from the year-ago quarter’s reported figure.
Summit Materials, Inc. (SUM - Free Report) currently has an Earnings ESP of +28.52% and a Zacks Rank of 3.
SUM’s earnings for the to-be-reported quarter are expected to have gained 7.7% from the year-ago quarter’s reported figure. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 18.2%.
Dream Finders Homes, Inc. (DFH - Free Report) currently has an Earnings ESP of +7.14% and a Zacks Rank of 1.
DFH’s earnings for the to-be-reported quarter are expected to have increased 55.6% from the year-ago quarter’s reported figure. The company reported better-than-expected earnings in the trailing four quarters, the average surprise being 144.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.