Why Is United Rentals (URI) Up 1.9% Since Last Earnings Report?

Core Viewpoint - United Rentals reported mixed third-quarter 2024 results, with earnings and revenues missing estimates but showing year-over-year improvement. The company has narrowed its guidance for key financial metrics while reaffirming its 2024 forecast mid-points [2][11]. Financial Performance - Adjusted EPS was $11.80, missing the Zacks Consensus Estimate of $12.49 by 5.5%, but increased 0.6% from the prior year [3]. - Total revenues reached $3.992 billion, slightly below the consensus mark of $3.994 billion, but grew 6% year over year [3]. - Equipment Rentals revenues increased by 7.4% year over year to $3.46 billion, with fleet productivity up 3.5% [4]. Segment Performance - General Rentals segment saw a 0.9% year-over-year growth in rental revenues to a record $2.327 billion, though rental gross margin contracted by 20 basis points to 37.6% [6]. - Specialty segment rental revenues improved by 23.9% year over year to a record $1.136 billion, with a gross margin contraction of 210 basis points to 50% [7]. Margins and EBITDA - Total equipment rentals' gross margin contracted by 30 basis points year over year to 41.6%. Adjusted EBITDA grew 2.9% year over year to $1.9 billion, but the adjusted EBITDA margin decreased by 140 basis points to 47.7% [8]. Balance Sheet and Cash Flow - As of September 30, 2024, cash and cash equivalents were $479 million, up from $363 million at the end of 2023. Total liquidity stood at $2.87 billion, while long-term debt increased to $11.9 billion [9]. - Cash from operating activities improved by 6.3% year over year to $3.5 billion, and free cash flow grew by 4.7% to $1.21 billion [10]. 2024 Guidance - Total revenues are now expected to be in the range of $15.1-$15.3 billion, reflecting an improvement from $14.332 billion reported in 2023 [11]. - Adjusted EBITDA is projected to be between $7.115 billion and $7.215 billion, an increase from $6.857 billion reported in 2023 [11]. - Net rental capital expenditure is now projected to be in the range of $2.05-$2.25 billion, following gross purchases of $3.55 billion [12]. Estimates and Outlook - Estimates for the stock have trended downward over the past month, indicating a potential shift in market sentiment [14]. - United Rentals holds a Zacks Rank 3 (Hold), suggesting an expectation of an in-line return from the stock in the coming months [16].