‘Historic demand’ fuels record results for United
28 October 2022
United Rentals has reported record third quarter rental revenues of $2.73 billion, an increase of $455 million or 20% year-over-year. Total revenues for the three months ending Sept. 30 were $3.051 billion, resulting in United raising its full year guidance for total revenue, adjusted EBITDA, and gross and net rental capital spending.
Total revenue is now expected in the range of $11.5 to $11.7 billion, an increase of $50 million at midpoint, with United expecting full year growth of more than 19%. The company also raised its outlook for gross CapEx to $3.25 to $3.45 billion, an increase of $350 million.
Speaking to the growth, United’s CEO and President Matthew Flannery commented, “Both of our segments in every one of our regions grew rental revenue year-over-year by double digits. Rental revenue from non-res construction was up 24%, infrastructure was up 11% and industrial was up 13%. And these are all consistent with the trends we’ve seen in recent quarters. Demand for specialty was strong across the segment with rental revenue up 23% year-over-year as a whole, led by our Mobile Storage and Fluid Solutions businesses.”
Flannery said there are a number of “unique dynamics that should help our industry continue to outpace the macro in virtually any economic cycle,” with a major contributor being the $550 billion of funding relating to the U.S. infrastructure bill. “This should trigger at least five years of opportunity,” he said during an invesetor’s call on Oct. 27. “There’s another $440 billion of federal tax incentives in the Inflation Reduction Act for clean energy and plant upgrades. And we think these will have a five- to 10-year impact.”
The company noted its key, non-residential construction indicators “remain encouraging, including customer sentiment.” In addition, Flannery said United sees “substantial opportunities next year across federally funded infrastructure projects, industrial manufacturing, energy and power. We expect to deliver another year of profitable growth...”
Flannery did note that while there are certain portions of the economogy that are slowing, United’s customer activity is “still on the upswing and demand for our equipment rental continues to be very strong. Customer sentiment and key industry indicators remain positive.”
For the third quarter, United opened 25 greenfields and it plans for an additional 11 cold starts by year-end.
“Our 25th year in business is also shaping up to be a record year of financial performance,” Flannery concluded. “We’ve got a great team in place, and we’ll continue to explore every avenue for growth and returns. The construction and industrial sectors we serve had their own tailwinds, driving the historic demand for our services. Our customers are building a strong book of business for 2023 and the secular shift towards renting and expanding the market.”