United Rentals Q1 Profit Dips, Beats Expectations
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Profit at United Rentals fell in the first quarter of 2025 but beat market expectations and boosted the stock price.
Stamford, Conn.-based United reported net income of $518 million in Q1, a decrease of 4.4% compared with a $542 million profit in the year-ago period.
Adjusted earnings per share of $8.86 topped the consensus estimate of $8.84 by 0.2%, according to Zacks Equity Research.
Revenue totaled $3.72 billion in the most recent quarter, surpassing the consensus mark of $3.56 billion by 4.4%, the research group said.
United said its profit fell due to weaker specialty rental margins, lower used equipment sales and higher expenses, including those related to the terminated H&E Equipment Services acquisition.
Herc Rentals outbid United for construction equipment supplier H&E. Herc ranks No. 4 among equipment rental suppliers, according to Transport Topics data, while H&E ranks No. 5. United is the top-ranked company in the sector.
The nearly $3.9 billion cash-and-stock offer, which is binding, is worth about $476 million or 14% more than United’s all-cash offer. United received a breakup fee of $64 million.
The $3.72 billion revenue total for United, which ranks No. 11 on the Transport Topics Top 100 list of the largest private carriers in North America, was a 6.6% increase compared with $3.49 billion in Q1 2024.
United’s Q1 rental revenue of $3.15 billion increased 7.4% from $2.93 billion a year earlier.
General rentals revenue increased 1.4% year over year to a first-quarter record of $2.1 billion from $2.07 billion in the year-ago period.
Specialty rentals revenue increased 21.8% year over year to a Q1 record of $1.046 billion from $859 million, much of the increase as a result of the March 2023 Yak Access acquisition. United acquired matting company Yak from Platinum Equity for about $1.1 billion.
United’s used equipment sales fell 1.6% year over year to $377 million from $383 million.
“2025 is off to a solid start, reflecting demand across both our construction and industrial end-markets. I’m pleased with the team’s commitment to putting our customers first, which ultimately translated to record first-quarter revenue,” CEO Matthew Flannery said in a statement accompanying the results.
During the company’s April 24 analyst conference call, Flannery added: “Our construction end market saw solid growth across both infrastructure and non-[residential] construction, while our industrial end market saw particular strength within power and chemical process. We continue to see new projects kicking off with a few recent examples including data centers, pharmaceuticals, airports and industrial manufacturing facilities.”
Analysts were duly impressed.
“The simple story of this quarter is healthier demand than we might have feared, and some margin pressures that, if not perfectly temporary, don’t feel structural. Nor do they feel slightly worrisome in the way Herc’s margins did earlier this week, and that should point to some relief for the stock,” Melius Research Founding Partner Rob Wertheimer said in an April 24 investor note.
“United Rentals grew rental revenue by a very healthy 7.4%, with the combination of time utilization and rental rate staying roughly in line with inflation. That fleet productivity metric, keeping up with inflation, answers most of the worry on margin. United Rental’s fleet is in good balance for supply vs. demand, and the industry seems to be OK as well,” Wertheimer said.
“Stepping back, the quarter illustrates some of the successful parts of United Rental’s long-term strategy,” he added. “Specialty is growing strongly, 15% pro forma and 22% overall, fueled in part by cross-selling from general rentals and overall customer relationships.”
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