Equipment rental company United Rentals, Inc. (URI) reported Wednesday a profit for the fourth quarter compared to a loss last year, boosted by improved margins and revenue growth amid increases in rental rates and rental volumes. Both adjusted earnings per share widened and quarterly revenues topped analysts' expectations.
"The fourth quarter marked a strong end to a stellar year for our company, particularly in light of the sluggish economy. Once again, we drove rental revenue ahead of the construction recovery through a combination of rate improvement and record time utilization on a larger fleet," CEO Michael Kneeland said in a statement.
The Greenwich, Connecticut-based company reported net income of $29 million or $0.39 per share for the fourth quarter, compared to a net loss of $21 million or $0.35 per share in the prior-year quarter.
Income from continuing operations for the quarter were $28 million or $0.39 per share, compared to a loss of $17 million or $0.29 per share in the year-ago quarter.
Excluding special items, adjusted earnings from continuing operations for the quarter soared to $0.82 per share from last year's $0.16 per share.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.59 per share for the fourth quarter. Analysts estimate typically exclude special items.
Total revenues for the quarter increased 25 percent to $746 million from $597 million in the same quarter last year, and topped eight Wall Street analysts' consensus estimate of $687.89 million.
Rental revenues grew 18.5 percent from last year, reflecting a 6.7 percent rise in rental rates and 15.1 percent increase in the volume of equipment on rent.
Total segment operating margins expanded 950 basis points to 19.8 percent from last year's 10.4 percent.
"We are tremendously excited about the opportunities of 2012, which we expect will be a transformative year for United Rentals. We're making good progress on all fronts toward our intended acquisition of RSC and the integration planning," Kneeland added.
United Rentals agreed in mid-December 2011 to buy Scottsdale, Arizona-based peer RSC Holdings, Inc. (RRR) in a cash-and-stock transaction valued at $18 per share, or a total enterprise value of $4.2 billion, including $2.3 billion of net debt.
For fiscal 2011, the company reported net income of $101 million or $1.38 per share, compared to a net loss of $26 million or $0.44 per share in the prior year.
Income from continuing operations for the year were $101 million or $1.38 per share, compared to a loss of $22 million or $0.38 per share in the year ago.
Excluding special items, adjusted earnings from continuing operations for the year soared to $1.87 per share from last year's $0.33 per share. Analysts expected the company to report earnings of $1.71 per share for fiscal 2011.
Net revenues for the full year grew 16.7 percent to $2.61 billion from $2.24 billion in the previous year. Street was looking for full-year 2011 revenues of $2.55 billion.
Looking ahead to fiscal 2012, the company said it expects an 5 percent in rental rates.
URI closed Wednesday's regular trading session at $34.77, up $0.80 or 2.36% on a volume of 3.0 million shares. The stock gained a further $1.79 or 5.11% in after-hours trading.
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