United Rentals ups investment to meet demand
By Murray Pollok20 October 2010
United Rentals reported a 2% increase in revenues to US$605 million for the three months to 30 September, with rental revenues increasing by 6% to $507 million. The company made a net profit of $23 million compared to break-even in the same quarter in 2009.
Although United said the recovery was progressing slowly, it is increasing its planned net fleet investment this year to $180-200 million, up from the previously announced $160-180 million. United said this was necessary to service key accounts and to meet rising demand.
"We increased our fleet investment to better meet demand and to further strengthen relationships with our key customers", said Michael Kneeland, United' chief executive officer, "This is exactly where we want to take the company -- toward better earnings in our core business, with stronger margins and sustainable fixed cost savings."
Mr Kneeland said business conditions had improved in all its operating regions; "Rental is a very attractive alternative to buying equipment right now, aided by tight credit markets and cautious customer behaviour. As a result, we are seeing increased demand despite the weakness in construction spending. We view record time utilization and sequential quarterly rate improvement as two very positive indicators of profitable growth."
Time utilisation in the third was 71.3%, an increase of 7.1 percentage points from the third quarter last year, and a record high for the company. Rental rates fell by 1.4% year over year, but improved 2.0% sequentially from the second quarter.