United Rentals (URI) has reported 18.48 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $109 million, or $1.27 a share in the quarter, compared with $92 million, or $1.01 a share for the same period last year. On an adjusted basis, earnings per share were at $1.63 for the quarter compared with $1.40 in the same period last year.

Revenue during the quarter grew 3.51 percent to $1,356 million from $1,310 million in the previous year period. Gross margin for the quarter contracted 26 basis points over the previous year period to 37.91 percent. Total expenses were 81.05 percent of quarterly revenues, up from 80.61 percent for the same period last year. That has resulted in a contraction of 44 basis points in operating margin to 18.95 percent.

Operating income for the quarter was $257 million, compared with $254 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $591 million compared with $584 million in the prior year period. At the same time, adjusted EBITDA margin contracted 100 basis points in the quarter to 43.58 percent from 44.58 percent in the last year period.  

Michael Kneeland, chief executive officer of United Rentals, said, "We were pleased with our momentum in the first quarter, particularly our 7% growth in volume and record time utilization driven by strength in our core construction markets. It was also encouraging to see positive trends in our upstream oil and gas business after the headwinds faced over the last several years. While our rental rates remained under some pressure, they continue to support our reaffirmed standalone 2017 guidance for total revenue, adjusted EBITDA and capital spending, and our increased guidance for free cash flow."

For financial year 2017, United Rentals projects revenue to be in the range of $6,050 million to $6,250 million.

The company has spent $134 million cash to meet investing activities during the quarter as against cash outgo of $17 million in the last year period. It has incurred capital expenditure of $20 million on net basis during the quarter, up 5.26 percent or $1 million from year ago period.

The company has spent $466 million cash to carry out financing activities during the quarter as against cash outgo of $560 million in the last year period.

Cash and cash equivalents stood at $337 million as on Mar. 31, 2017, up 53.88 percent or $118 million from $219 million on Mar. 31, 2016.

Working capital turns positive
Working capital of United Rentals has turned positive to $3 million on Mar. 31, 2017 from negative $47 million on Mar. 31, 2016. Current ratio was at 1 as on Mar. 31, 2017, up from 0.96 on Mar. 31, 2016.

Cash conversion cycle (CCC) has decreased to 28 days for the quarter from 36 days for the last year period. Days sales outstanding went down to 59 days for the quarter compared with 61 days for the same period last year.

Days inventory outstanding has decreased to 4 days for the quarter compared with 8 days for the previous year period. At the same time, days payable outstanding went up to 35 days for the quarter from 34 for the same period last year.