United Rentals Raises Outlook as Rental Growth Accelerates
The equipment-rental company reported second-quarter diluted earnings of $12.03 a share.
United Rentals (URI), the equipment-rental company, raised its annual outlook after rental revenue reached a record and fleet productivity accelerated for a second consecutive quarter.
The pace of growth strengthened from the start of the year. Rental revenue rose 12.7% from a year earlier, compared with 8.7% growth in the first quarter, while fleet productivity increased 3.4% after gains of 2.3% in the first quarter and 0.5% in the fourth quarter.
Second-quarter revenue rose 11.8% to $4.410 billion from $3.943 billion a year earlier. Net income increased 21.1% to $753 million, and diluted earnings climbed from $9.59 a share a year earlier. Adjusted earnings rose to $12.76 a share from $10.47.
Specialty rentals led the advance, with rental revenue rising 24.8% to $1.431 billion, while general-rentals revenue increased 6.6% to $2.418 billion. Growth also reflected a 7.1% increase in average fleet size, higher fleet productivity and a 3.7% contribution from ancillary and re-rent revenue.
The specialty mix weighed on profitability even as total equipment-rental gross margin expanded 30 basis points to 39.0%. General-rentals gross margin rose 70 basis points to 35.8%, while specialty-rentals margin fell 140 basis points to 44.4% as lower-margin ancillary and re-rent business grew.
Adjusted EBITDA rose 13.6% to a record $2.056 billion, and the reported margin increased 70 basis points to 46.6%. A $49 million pretax gain from the sale of part of the scaffolding business accounted for that expansion; excluding the gain, adjusted EBITDA margin declined 40 basis points, primarily because of the specialty-rental margin compression. The sale added $0.58 a share to diluted earnings.
United Rentals now expects 2026 revenue of $17.5 billion to $17.8 billion, up from its previous range of $16.9 billion to $17.4 billion. It projects adjusted EBITDA of $7.975 billion to $8.125 billion, lifting the midpoint by $300 million.
The company also raised the midpoint of its net rental-capital-spending outlook by $450 million and increased its operating-cash-flow forecast, while holding free-cash-flow guidance at $2.15 billion to $2.45 billion. First-half free cash flow declined 4.1% as rental-equipment purchases increased, leaving the higher revenue outlook paired with a larger fleet investment.