We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
United Rentals (URI) to Post Q4 Earnings: What's in Store?
Read MoreHide Full Article
United Rentals, Inc. (URI - Free Report) is scheduled to report fourth-quarter 2021 results on Jan 26, after market close.
In the last reported quarter, its earnings and revenues missed the Zacks Consensus Estimate by 3.2% and 0.3%, respectively. This largest equipment rental company’s third-quarter earnings and revenues grew 21.9% and 18.7% year over year, respectively.
Markedly, its earnings surpassed expectations in 29 of the last 33 quarters. The company topped revenue estimates in 17 of the trailing 18 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has decreased to $6.91 per share from $6.98 over the past seven days. Nonetheless, the estimated figure indicates 37.1% growth from the year-ago earnings of $5.04 per share. The consensus mark for revenues is $2.76 billion, suggesting a 21.3% year-over-year improvement.
Improved activity level backed by stronger demand in each of the end markets served in North America (industrial and other non-construction, commercial construction, and residential construction) is expected to aid United Rentals’ fourth-quarter results. Recovery across geographies and verticals — with solid activity in heavy manufacturing, corporate campuses, schools and transmission lines — is expected to have contributed to its top line.
The company’s investment in the General Rental segment (wherein the primary growth drivers are non-residential construction and plant maintenance) also bodes well. Both non-residential and maintenance areas have been gaining traction, and verticals like chemical process, food and beverage, metals and mining as well as healthcare have been exhibiting solid growth.
Furthermore, acquisitions (like that of General Finance Corporation and Franklin Equipment buyouts) are expected to have helped United Rentals boost the top line in the quarter.
Overall, construction and industrial markets are expected to have aided the company’s performance. On the industrial side, manufacturing, chemical, processing, metals and mining and entertainment have been performing well. On the Construction side, the gains have been mostly from non-residential construction like warehouse, data center work and power.
The Zacks Consensus Estimate for Equipment Rentals revenues (accounting for more than 85% of its total revenues) of $2,274 million indicates 22.7% growth from the year-ago period. The same for rental equipment revenues is $338 million, which suggests an increase of 22.9% from the year-ago reported figure.
Yet, the consensus estimate for new equipment sales suggests a decrease of 1.3% year over year. That said, the consensus mark for Contractor supplies sales indicates 6.8% growth from the prior year. The same for Service and other revenues suggests 12.8% growth on a year-over-year basis.
From the margin perspective, higher rental operating costs in a slower growth environment — including expenses related to repair and maintenance of fleet in upstream oil and gas markets — as well as an increase in lower-margin used equipment sales are likely to have affected its bottom line. Importantly, supply chain disruptions and higher inflation may have been a cause of concern.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for United Rentals for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: United Rentals has an Earnings ESP of -1.79%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #1.
Shares of Boise Cascade have gained 32.7% over the past year. BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 45.5%.
Vulcan Materials Company (VMC - Free Report) has an Earnings ESP of +6.85% and a Zacks Rank #2.
Shares of Vulcan Materials have gained 18.6% over the past year. VMC’s earnings topped the consensus mark twice but missed the same on the other two occasions, with the average surprise being 15.9%.
PulteGroup, Inc. (PHM - Free Report) has an Earnings ESP of +1.88% and a Zacks Rank #2.
Shares of PHM have gained 5.2% over the past year. PHM’s earnings topped the consensus mark thrice but missed the same on one occasion, with the average surprise being 3.8%.
Image: Bigstock
United Rentals (URI) to Post Q4 Earnings: What's in Store?
United Rentals, Inc. (URI - Free Report) is scheduled to report fourth-quarter 2021 results on Jan 26, after market close.
In the last reported quarter, its earnings and revenues missed the Zacks Consensus Estimate by 3.2% and 0.3%, respectively. This largest equipment rental company’s third-quarter earnings and revenues grew 21.9% and 18.7% year over year, respectively.
Markedly, its earnings surpassed expectations in 29 of the last 33 quarters. The company topped revenue estimates in 17 of the trailing 18 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has decreased to $6.91 per share from $6.98 over the past seven days. Nonetheless, the estimated figure indicates 37.1% growth from the year-ago earnings of $5.04 per share. The consensus mark for revenues is $2.76 billion, suggesting a 21.3% year-over-year improvement.
United Rentals, Inc. Price and EPS Surprise
United Rentals, Inc. price-eps-surprise | United Rentals, Inc. Quote
Factors to Note
Improved activity level backed by stronger demand in each of the end markets served in North America (industrial and other non-construction, commercial construction, and residential construction) is expected to aid United Rentals’ fourth-quarter results. Recovery across geographies and verticals — with solid activity in heavy manufacturing, corporate campuses, schools and transmission lines — is expected to have contributed to its top line.
The company’s investment in the General Rental segment (wherein the primary growth drivers are non-residential construction and plant maintenance) also bodes well. Both non-residential and maintenance areas have been gaining traction, and verticals like chemical process, food and beverage, metals and mining as well as healthcare have been exhibiting solid growth.
Furthermore, acquisitions (like that of General Finance Corporation and Franklin Equipment buyouts) are expected to have helped United Rentals boost the top line in the quarter.
Overall, construction and industrial markets are expected to have aided the company’s performance. On the industrial side, manufacturing, chemical, processing, metals and mining and entertainment have been performing well. On the Construction side, the gains have been mostly from non-residential construction like warehouse, data center work and power.
The Zacks Consensus Estimate for Equipment Rentals revenues (accounting for more than 85% of its total revenues) of $2,274 million indicates 22.7% growth from the year-ago period. The same for rental equipment revenues is $338 million, which suggests an increase of 22.9% from the year-ago reported figure.
Yet, the consensus estimate for new equipment sales suggests a decrease of 1.3% year over year. That said, the consensus mark for Contractor supplies sales indicates 6.8% growth from the prior year. The same for Service and other revenues suggests 12.8% growth on a year-over-year basis.
From the margin perspective, higher rental operating costs in a slower growth environment — including expenses related to repair and maintenance of fleet in upstream oil and gas markets — as well as an increase in lower-margin used equipment sales are likely to have affected its bottom line. Importantly, supply chain disruptions and higher inflation may have been a cause of concern.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for United Rentals for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: United Rentals has an Earnings ESP of -1.79%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #1.
Shares of Boise Cascade have gained 32.7% over the past year. BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 45.5%.
Vulcan Materials Company (VMC - Free Report) has an Earnings ESP of +6.85% and a Zacks Rank #2.
Shares of Vulcan Materials have gained 18.6% over the past year. VMC’s earnings topped the consensus mark twice but missed the same on the other two occasions, with the average surprise being 15.9%.
PulteGroup, Inc. (PHM - Free Report) has an Earnings ESP of +1.88% and a Zacks Rank #2.
Shares of PHM have gained 5.2% over the past year. PHM’s earnings topped the consensus mark thrice but missed the same on one occasion, with the average surprise being 3.8%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.