United Rentals maintains momentum and upgrades outlook

United Rentals has increased its outlook for the full year, with expected revenues and capital expenditure on fleet both likely to be higher than previously stated. The company said it continued to see growth in the market, particularly on large projects.

It is now estimating annual revenues in the range US$16.0-16.2 billion, against $15.8-16.1 billion, and gross capital spending on fleet of between $4.0 billion and $4.2 billion, up from $3.65 billion to $3.95 billion.

Total revenues for the third quarter of the year rose by 5.9% to $4.23 billion, with general rentals up 3.1% and specialty growing by 11.4%. Specialty represents around a third of the company’s rental revenues. EBITDA profit was up 2% to $1.91 billion for the quarter.

Matthew Flannery, chief executive officer of United, said the company continued to “lean into growth across both our general rentals and specialty businesses, and our updated guidance reflects the momentum we expect to carry through the rest of the year.”

“Looking ahead, we are encouraged by the growth opportunities our customers see on the horizon, particularly within large projects and across key verticals.”

He said United’s one-stop-shop model, service levels and technology differentiated it “and enables us to outpace the market.”

The company’s presentation to investors included ‘aspirational targets’ for revenues of $20 billion by 2028, of which $7 billion would be generated by specialty rentals.

That would mean a compound annual growth rate (CAGR) of around 7.5% for the whole business and closer to 6% for specialty. If realised, it would mean a significant slowing in the growth of specialty, which has seen a CAGR of 20% between 2014 and 2024.