Yahoo Finance Factors Setting the Tone for United Rentals (URI) Q1 Earnings
United Rentals, Inc. URI is scheduled to report first-quarter 2023 results on Apr 26, after market close.
In the last reported quarter, United Rentals’ adjusted earnings missed the Zacks Consensus Estimate by 3.8%, but revenues beat the same by 0.1%, respectively. This largest equipment rental company’s fourth-quarter 2022 adjusted earnings and revenues grew 31.8% and 18.7% year over year, respectively.
Markedly, its earnings surpassed expectations in 33 out of the last 38 quarters. The company’s revenues topped the consensus mark in 21 out of the trailing 23 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has increased to $8.12 from $8.01 per share over the past 30 days. The estimated figure indicates 41.7% growth from the year-ago earnings of $5.73 per share. The consensus mark for revenues is $3.14 billion, suggesting a 24.3% year-over-year improvement.
United Rentals, Inc. Price and EPS Surprise
United Rentals, Inc. price-eps-surprise | United Rentals, Inc. Quote
Factors to Note
United Rentals’ first quarter is expected to reflect sustained demand in its end markets and the strength of its core rental business. 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’ first-quarter results.
Notably, federally funded infrastructure projects, industrial manufacturing, energy and power activities are expected to aid the company’s quarterly results. Furthermore, acquisitions are expected to have helped United Rentals to boost the top line in the quarter to be reported.
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 is expected to reflect 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, industrial markets are expected to have aided the company’s performance.
Equipment Rentals revenues (which accounted for 86.9% of its total revenues in 2022) are expected to have registered growth in the to-be-reported quarter. We expect Equipment Rentals revenues to increase 21.7% to $2,646 million in the first quarter from a year ago.
Our model predicts, Rental Equipment revenues to grow 17.6% to $248.1 million from the year-ago reported figure.
New Equipment sales suggest a decrease of 9% year over year. The contractor supplies sales indicate 14.3% growth from the prior year. Service and other revenues suggests 15.6% 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 an 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 +4.51%. 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 #3.
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 on their quarters to be reported.
Howmet Aerospace Inc. HWM has an Earnings ESP of +0.88% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
HWM’s earnings topped the consensus mark in three of the last four quarters but met on one occasion, with the average negative surprise being 3.2%. Earnings per share for the to-be-reported quarter are expected to increase 22.6% year over year.
Trex Company, Inc. TREX has an Earnings ESP of +11.34% and a Zacks Rank #3.
TREX’s earnings beat the estimates in three of the trailing four quarters and missed once, the average surprise being 7.2%.
Owens Corning OC has an Earnings ESP of +3.18% and a Zacks Rank #3.
OC’s earnings beat the consensus mark in each of the trailing four quarters, the average surprise being 12.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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United Rentals, Inc. (URI) : Free Stock Analysis Report
Owens Corning Inc (OC) : Free Stock Analysis Report
Trex Company, Inc. (TREX) : Free Stock Analysis Report
Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report
