The 10-second takeaway
For the quarter ended Dec. 31 (Q4), United Rentals beat expectations on revenue and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly, and earnings per share improved.
Margins increased across the board.
United Rentals reported revenue of $746.0 million. The nine analysts polled by S&P Capital IQ hoped for a top line of $689.7 million. Sales were 25% higher than the prior-year quarter's $597.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.82. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.58 per share on the same basis. GAAP EPS were $0.39 for Q4 versus -$0.36 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 51.7%, 2,240 basis points better than the prior-year quarter. Operating margin was 19.8%, 940 basis points better than the prior-year quarter. Net margin was 3.9%, 740 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $586.1 million. On the bottom line, the average EPS estimate is $0.00.
Next year's average estimate for revenue is $2.84 billion. The average EPS estimate is $2.49.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 186 members out of 209 rating the stock outperform, and 23 members rating it underperform. Among 63 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 54 give United Rentals a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on United Rentals is outperform, with an average price target of $33.45.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. 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.