Please ensure Javascript is enabled for purposes of website accessibility

Why United Rentals, Inc. Shares Popped Today

By Jeremy Bowman – Jul 21, 2016 at 12:39PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The construction rental company jumped on a better-than-expected earnings report.

Image source: United Rentals.

What: United Rentals, Inc. (URI 2.88%) shares were flying higher today after the construction equipment rental company turned in a strong second-quarter earnings report, breezing past estimates.

So what: United posted earnings per share of $2.06, up 5.6% from $1.95 a year ago, and much better than the analyst consensus at $1.83. Revenue was essentially flat at $1.42 billion, slightly ahead of estimates at $1.41 billion.

Commenting on the quarter, CEO Michael Kneeland said, "We were pleased with the positive progression of monthly rental rates," which he attributed to internal initiatives taken by the company. He also said he was optimistic about the business improving "seasonally and cyclically."

Now what: United maintained its revenue guidance for the full year at $5.6 to $5.8 billion and adjusted EBITDA at $2.65 to $2.75 billion. It raised its guidance for rental rates slightly, but lowered time utilization guidance by 30 basis points.

With the American economy still looking strong, United Rentals would seem to be poised for continued profit growth as the construction sector is closely tied to overall economic growth. The stock fell sharply following the Brexit vote but has more than recouped those losses, and Kneeland reassured investors that the business has "considerable flexibility in operating our business to address changing market dynamics."

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

United Rentals Stock Quote
United Rentals
$361.64 (2.88%) $10.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.