US-based United Rentals, the largest rental company in the world by revenues, has reported a slight dip in first quarter results year-on-year, and adjusted its full-year outlook.
Total revenues were US$1.31 billion (€1.56 billion) for the first three months of the year, of which rental revenues stood at US$1.12 billion (€992 million). This compared to US$1.32 billion (€1.17 billion) and US$1.13 billion (€1 billion), respectively, for the same period last year.
Revenues from sales of used equipment stood at US$115 million (€102 million), compared to US$116 million (€103 million) in the first quarter of 2015.
The company said combined rental revenue from its Trench Safety and Power & HVAC businesses increased 12% year-over-year, primarily on a same store basis.
First quarter net income slipped to US$92 million (€81 million), compared with US$115 million (€102 million) for the same three months in 2015. United Rentals said utilisation stood at 64.1% for the period, down 10 basis points year-on-year.
CEO Michael Kneeland said, "During the first quarter we saw broad-based, improving demand in many of our core markets, which was most apparent in accelerating volume. On the other hand, we continue to face significant headwinds from oil and gas and from our Canadian business, pressuring rental rates.
“We are encouraged, however, by industry data that shows that fleet supply-demand dynamics are moving towards equilibrium in the US. Based on what we see and hear in the marketplace, we continue to expect our business to improve both seasonally and cyclically, with our updated guidance reflecting the net impact of weaker rental rates due primarily to what we believe are temporary factors.
“Our business is larger, more diverse and more operationally effective than it has ever been, and we have the tools to maintain our industry leadership and financial strength, including significant flexibility to manage both our costs and capital plans in any environment. We remain confident in our ability to generate at least US$900 million (€797 million) of free cash flow and then to redeploy this capital in an optimal manner."
For the full year, United Rental said it now expected to generate total revenues of between US$5.6 billion (€5 billion) and US$5.8 billion (€5.1 billion), compared to its previous forecast range of US$5.65 billion (€6 billion) to US$5.95 billion (€5.3 billion).
The company added that it now expects to see a decrease in rental rates of between 3% and 4% for 2016, compared to its previous outlook of a decrease in the range of 1% to 2%.