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.
In the last reported quarter, United Rentals’ adjusted earnings and revenues topped the Zacks Consensus Estimate by 19.6% and 2.8%, respectively. This largest equipment rental company’s second-quarter adjusted earnings and revenues grew 68.7% and 21.2% year over year, respectively.
Markedly, its earnings surpassed expectations in 32 out of the last 36 quarters. The company’s revenues topped the consensus mark in 20 out of the trailing 21 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has increased to $9.00 from $8.89 per share over the past 30 days. The estimated figure indicates 36.8% growth from the year-ago earnings of $6.58 per share. The consensus mark for revenues is $3.09 billion, suggesting a 19% year-over-year improvement.
The company’s quarterly results are expected to benefit from solid mega-project activity. URI’s solid exposure to blue-chip engineering & construction accounts, and industry-leading market share are expected to reflect in its quarterly performance.
The company’s investment in the General Rental segment (wherein the primary growth drivers are non-residential construction and plant maintenance) also bodes well. Overall, construction and industrial markets are expected to have aided the company’s performance. On the industrial side, chemical, energy, processing, metals and mining and healthcare have been performing well. On the construction side, gains have mostly been from non-residential construction like warehouse, data center work and power.
Higher pricing and improved activity level, backed by stronger demand in each of the end markets served in North America (industrial and other non-construction, and commercial construction), are expected to aid United Rentals’ third-quarter results.
Furthermore, acquisitions (like that of General Finance Corporation and Franklin Equipment buyouts) are expected to have helped United Rentals to boost the top line in the quarter to be reported.
Equipment Rentals revenues (accounting for more than 75% of its total revenues) are expected to have registered growth in the to-be-reported quarter. The Zacks Consensus Estimate for Equipment Rentals revenues is $2,682 million, which suggests an increase of 17.8% from the year-ago reported figure.
The Zacks Consensus Estimate for Rental Equipment revenues is $223 million, which suggests an increase of 21.9% from the year-ago reported figure.
The consensus estimate for new equipment sales suggests a decrease of 8.1% year over year. That said, the consensus mark for Contractor supplies sales indicates 17.9% growth from the prior year. The consensus mark for Service and other revenues suggests 23.3% growth on a year-over-year basis.
From the margin perspective, supply-chain disruptions and higher inflation might be causes of concern.
What the Zacks Model Unveils
Our proven model predicts a likely 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. That is exactly the case here, as you will see below.
Earnings ESP: United Rentals has an Earnings ESP of +1.46%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies in the Zacks Construction sector which, according to our model, have the right combination of elements to post an earnings beat in their quarters to be reported.
Lennox International Inc. (LII - Free Report) has an Earnings ESP of +0.34% and carries a Zacks Rank #3.
LII’s earnings topped the consensus mark in three of the last four quarters but missed on one occasion, with the average surprise being 7.9%.
PulteGroup, Inc. (PHM - Free Report) has an Earnings ESP of +0.18% and carries a Zacks Rank #3.
PHM’s earnings topped the consensus mark in three of the last four quarters but missed on one occasion, with the average surprise being 5.6%.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +0.80% and a Zacks Rank #3.
KBR’s earnings topped the consensus mark in the last four quarters, with the average surprise being 11.5%.
Image: Bigstock
Factors Setting the Tone for United Rentals' (URI) Q3 Earnings
United Rentals, Inc. (URI - Free Report) is scheduled to report third-quarter 2022 results on Oct 26, after market close.
In the last reported quarter, United Rentals’ adjusted earnings and revenues topped the Zacks Consensus Estimate by 19.6% and 2.8%, respectively. This largest equipment rental company’s second-quarter adjusted earnings and revenues grew 68.7% and 21.2% year over year, respectively.
Markedly, its earnings surpassed expectations in 32 out of the last 36 quarters. The company’s revenues topped the consensus mark in 20 out of the trailing 21 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has increased to $9.00 from $8.89 per share over the past 30 days. The estimated figure indicates 36.8% growth from the year-ago earnings of $6.58 per share. The consensus mark for revenues is $3.09 billion, suggesting a 19% year-over-year improvement.
United Rentals, Inc. Price and EPS Surprise
United Rentals, Inc. price-eps-surprise | United Rentals, Inc. Quote
Factors to Note
The company’s quarterly results are expected to benefit from solid mega-project activity. URI’s solid exposure to blue-chip engineering & construction accounts, and industry-leading market share are expected to reflect in its quarterly performance.
The company’s investment in the General Rental segment (wherein the primary growth drivers are non-residential construction and plant maintenance) also bodes well. Overall, construction and industrial markets are expected to have aided the company’s performance. On the industrial side, chemical, energy, processing, metals and mining and healthcare have been performing well. On the construction side, gains have mostly been from non-residential construction like warehouse, data center work and power.
Higher pricing and improved activity level, backed by stronger demand in each of the end markets served in North America (industrial and other non-construction, and commercial construction), are expected to aid United Rentals’ third-quarter results.
Furthermore, acquisitions (like that of General Finance Corporation and Franklin Equipment buyouts) are expected to have helped United Rentals to boost the top line in the quarter to be reported.
Equipment Rentals revenues (accounting for more than 75% of its total revenues) are expected to have registered growth in the to-be-reported quarter. The Zacks Consensus Estimate for Equipment Rentals revenues is $2,682 million, which suggests an increase of 17.8% from the year-ago reported figure.
The Zacks Consensus Estimate for Rental Equipment revenues is $223 million, which suggests an increase of 21.9% from the year-ago reported figure.
The consensus estimate for new equipment sales suggests a decrease of 8.1% year over year. That said, the consensus mark for Contractor supplies sales indicates 17.9% growth from the prior year. The consensus mark for Service and other revenues suggests 23.3% growth on a year-over-year basis.
From the margin perspective, supply-chain disruptions and higher inflation might be causes of concern.
What the Zacks Model Unveils
Our proven model predicts a likely 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. That is exactly the case here, as you will see below.
Earnings ESP: United Rentals has an Earnings ESP of +1.46%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: URI currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks With Favorable Combination
Here are some other companies in the Zacks Construction sector which, according to our model, have the right combination of elements to post an earnings beat in their quarters to be reported.
Lennox International Inc. (LII - Free Report) has an Earnings ESP of +0.34% and carries a Zacks Rank #3.
LII’s earnings topped the consensus mark in three of the last four quarters but missed on one occasion, with the average surprise being 7.9%.
PulteGroup, Inc. (PHM - Free Report) has an Earnings ESP of +0.18% and carries a Zacks Rank #3.
PHM’s earnings topped the consensus mark in three of the last four quarters but missed on one occasion, with the average surprise being 5.6%.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +0.80% and a Zacks Rank #3.
KBR’s earnings topped the consensus mark in the last four quarters, with the average surprise being 11.5%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.