Tags: United | Rentals | turnaround | URI

United Rentals Starting a Turnaround

By    |   Tuesday, 07 February 2012 09:36 AM

Equipment rental player United Rentals (URI) has begun its surge, say analysts. The under-the-radar outfit logged three years of sales declines through 2010. Last year, however, United Rentals began starting its expected turnaround. Sales and earnings are expected to boom in 2012, according to S&P analysts.

United Rentals has more than 500 locations in 48 states and in all 10 Canadian provinces. Through this network, the Connecticut company rents out heavy machinery and hand tools to Fortune 500 companies, small businesses and homeowners.

Commercial construction is United Rentals’ largest customer base, though it’s highly diversified, notes S&P. Given a tepid economic recovery, businesses and consumers increasingly turn to rental companies for their equipment rather than buying.

To further fuel sales, United Rental agreed to buy RSC Holdings for $1.9 billion in December. This merger will accelerate industrial client growth and lower costs, said the company.

For fourth quarter, United Rentals reported revenue of $746 million, up from $597 million in 2010. Diluted, normalized earnings per share were 56 cents per share, compared to a 12 cents loss a year before.

For 2012 full year, the Wall Street earnings consensus is an estimated $2.49 per share.


Analysts like what they see. Of the 12 analysts followed by Thomson/First Call, three have strong buy recommendations on United Rentals and six have buys, with three holds.

S&P analysts rate United Rentals a strong buy, citing a streamlined cost structure and rising rental rates in 2012.

The company next reports on April 25.

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Tuesday, 07 February 2012 09:36 AM
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