United Rentals returns to profit and sees "choppy recovery"
22 July 2010
United Rentals reported a net profit of US$12 million for the second quarter of 2010 on total revenues of $557 million, down 10%.
Rental revenues were almost stable at $450 million, with the revenue fall resulting from a big reduction in used equipment sales from $84 to $37 million.
Michael Kneeland, chief executive officer of United Rentals, said he expected a "choppy recovery" but that the company believed it was seeing "the early stages of a cyclical upturn on top of the normal seasonal benefit".
He said it had been a strong quarter, with same-store rental revenues increasing 2.7%, and year over year growth in six of its nine operating regions; "We reported the highest time utilisation of any second quarter in our company's history. Rental rates, while down year over year, improved sequentially each month."
Time utilisation increased 4.1 percentage points compared with the same quarter last year to 65.4%, "reflecting an increase in demand and more effective management of a smaller fleet", said United.
Mr Kneeland said contractors had limited access to capital and were "choosing to rent rather than buy equipment. We find it encouraging that demand is coming from more than one source as we move into a recovery."