United Rentals, Inc. URI reported third-quarter 2026 results, with adjusted earnings per share and total revenues beating the Zacks Consensus Estimate and increasing year over year.
Strong rental demand and operating efficiencies supported the results. Fleet productivity, which combines rental rates, time utilization and mix, improved 6.5% year over year.
URI stock inched up 1% in yesterday’s after-hours trading, following the earnings release.
URI's Q3 Earnings & Revenues
URI’s adjusted earnings of $15.55 per share topped the Zacks Consensus Estimate of $13.83 by 12.4% and grew 32.9% year over year from $11.70 per share.
Total revenues rose 15.7% year over year to $4.89 billion and surpassed the consensus estimate of $4.69 billion by 4.3%.
United Rentals, Inc. Price, Consensus and EPS Surprise
United Rentals, Inc. price-consensus-eps-surprise-chart | United Rentals, Inc. Quote
URI's Rental Revenues Reach a Quarterly Record
Rental revenues increased 17.8% year over year to a quarterly record of $4.32 billion. Average fleet size, measured at original equipment cost, rose 7.9%. Owned equipment rental revenues grew 12.9% to $3.32 billion. Revenues from re-renting equipment sourced from other vendors surged 76.7% to $129 million, while ancillary and other rental revenues climbed 33% to $871 million.
Used equipment sales rose 4.5% to $348 million, with an adjusted gross margin of 46.3% compared with 45.9% a year earlier. New equipment sales fell 11.6% to $84 million. Contractor supplies sales and service and other revenues increased 9.3% to $47 million and 5.4% to $98 million, respectively.
United Rentals' Specialty Business Leads Growth
General Rentals segment rental revenues increased 8.8% year over year to $2.61 billion. Rental gross profit grew 13.8% to $1 billion, while gross margin expanded 170 basis points (bps) to 38.4%. Specialty rental revenues surged 34.7% to $1.7 billion. Rental gross profit increased 42.3% to $811 million, with gross margin expanding 250 bps to 47.6%.
Both segments benefited from efficiencies in depreciation, labor and benefits, repairs and maintenance, and delivery. Faster growth in lower-margin ancillary and re-rent revenues partly offset these gains.
URI Expands Profitability Despite Higher Costs
Gross profit increased 22.9% to $2.05 billion, with gross margin improving to 41.8% from 39.4%. Selling, general and administrative expenses rose 15.6% to $511 million but declined to 10.4% of revenues from 10.5%.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 19.8% to a quarterly record of $2.33 billion. Its margin expanded 160 bps to 47.6%, supported partly by a higher proportion of revenues from equipment rentals. Operating income grew 26.5% to $1.41 billion, with operating margin increasing to 28.8% from 26.3%.
United Rentals Strengthens Cash Generation
For the first nine months of 2026, operating cash flow rose 25.4% to $4.93 billion. Free cash flow increased 19.2% to $1.42 billion, including $27 million of restructuring-related payments.
United Rentals ended September 2026 with liquidity of $2.62 billion, including $153 million in cash and equivalents. Net leverage, or net debt divided by trailing 12-month adjusted EBITDA, improved to 1.8x from 1.9x at the end of 2025. Total debt increased to $14.67 billion from $14.23 billion over that period.
URI Keeps Shareholder Returns on Track
URI returned $1.496 billion to shareholders during the first nine months of 2026, comprising $1.125 billion in share repurchases and $371 million in dividends. It completed its prior $2 billion repurchase program and began its new $5 billion authorization.
The company still expects $1.5 billion of share repurchases in 2026. It declared a quarterly dividend of $1.97 per share, payable Nov. 25, 2026, to shareholders of record Nov. 11, 2026.
United Rentals Raises 2026 Guidance
Management raised its revenue outlook to $18-$18.2 billion from $17.5-$17.8 billion. Adjusted EBITDA is now projected at $8.3-$8.4 billion compared with $7.98-$8.13 billion previously.
Operating cash flow is expected at $6.25-$6.85 billion, up from $5.85-$6.65 billion. The free cash flow outlook, excluding restructuring-related payments, remains $2.15-$2.45 billion.
Net rental capital expenditures are projected at $3.75-$4.05 billion after gross purchases of $5.2-$5.5 billion compared with $3.4-$3.8 billion after gross purchases of $4.85-$5.25 billion previously. Management cited customer confidence, backlogs and large-project momentum as support for the raised outlook.
URI’s Zacks Rank & Few Stocks Poised to Beat Earnings
United Rentals currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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.
Sterling Infrastructure, Inc. STRL has an Earnings ESP of +0.80% and a Zacks Rank of 2 at present.
Sterling’s earnings beat estimates in each of the last four quarters, the average surprise being 27.2%. The company’s earnings for the third quarter of 2026 are expected to grow 74.4% year over year.
AAON, Inc. AAON currently has an Earnings ESP of +2.66% and a Zacks Rank #3 (Hold).
AAON’s earnings beat estimates in three of the last four quarters and missed on the remaining occasion, the average surprise being 21.6%. The company’s earnings for the third quarter of 2026 are expected to increase 54.1% year over year.
Argan, Inc. AGX has an Earnings ESP of +4.79% and a Zacks Rank of 3.
Argan’s earnings beat estimates in each of the last four quarters, the average surprise being 44.2%. The company’s earnings for the third quarter of fiscal 2027 are expected to increase 53.9% year over year.
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United Rentals, Inc. (URI): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).