United Rentals, Inc. announced financial results for the third quarter 20181. Total revenue was $2.116 billion and rental revenue was $1.861 billion for the third quarter, compared with $1.766 billion and $1.536 billion, respectively, for the same period last year. On a GAAP basis, the company reported third quarter net income of $333 million, or $4.01 per diluted share, compared with $199 million, or $2.33 per diluted share, for the same period last year. The third quarter 2018 includes a net income benefit associated with the Tax Cuts and Jobs Act (the “Tax Act”) that was enacted in December 2017. The Tax Act reduced the U.S. federal corporate statutory tax rate from 35 percent to 21 percent, which contributed an estimated $0.73 to earnings per diluted share for the third quarter 20182.
Adjusted EPS3 for the quarter was $4.74 per diluted share, compared with $3.25 per diluted share for the same period last year. The reduction in the tax rate discussed above contributed an estimated $0.87 to adjusted EPS for the third quarter 20182. Adjusted EBITDA3 was $1.059 billion and adjusted EBITDA margin3 was 50.0 percent, reflecting increases of $180 million and 20 basis points, respectively, from the same period last year. Excluding the impact of the BakerCorp acquisition, adjusted EBITDA margin improved 80 basis points year-over-year to a record of 50.6 percent.
Third Quarter 2018 Highlights
- Rental revenue4 increased 21.2 percent year-over-year. Owned equipment rental revenue increased 20.3 percent, reflecting increases of 17.8 percent in the volume of equipment on rent and 2.1 percent in rental rates.
- Pro forma1 rental revenue increased 10.9 percent year-over-year, reflecting growth of 7.4 percent in the volume of equipment on rent and a 2.1 percent increase in rental rates.
- Time utilization decreased 100 basis points year-over-year to 70.9 percent, primarily reflecting the impact of the Neff and BakerCorp acquisitions. On a pro forma basis, time utilization decreased 10 basis points year-over-year to 70.7 percent.
- For the company’s specialty segment, Trench, Power and Fluid Solutions, rental revenue increased by 39.5 percent year-over-year, including a 12.7% increase on a same store basis. Rental gross margin decreased by 250 basis points to 52.3 percent. The decrease in rental gross margin was primarily due to the impact of the BakerCorp acquisition and an increase in lower-margin fuel revenues primarily within the Power and HVAC region1.