United Rentals, Inc. (NYSE: URI) stock fell over 7.1% on 18th July, 2019 (as of 11:47 am GMT-4; Source: Google finance) as the firm trimmed the top of its guidance range for the year. Net income for the second quarter of 2019 was $270 million was flat with last year. Net interest expense increased $68 million year-over-year primarily due to debt issued to fund the BakerCorp and BlueLine acquisitions, and a loss of $32 million associated with the full redemption of our 5 3/4 % Senior Notes. Operating income increased 12.6% year-over-year to $529 million. Adjusted EBITDA increased 18.3% year-over-year to $1.073 billion, while adjusted EBITDA margin decreased 110 basis points to 46.9%. The decline in adjusted EBITDA margin primarily reflects the acquisitions of BakerCorp and BlueLine. For the first six months of 2019, net cash from operating activities decreased 3.6% to $1.590 billion and free cash flow, including aggregated merger and restructuring payments, rose 11% to $780 million. Free cash flow for the first six months of 2019 included rental gross capital expenditures of $1.129 billion, which is a 7.9% decline from a year ago. ROIC was 10.8% for the 12 months ended June 30, 2019, exceeding both the 10% ROIC for the 12 months ended June 30, 2018, and the company’s current weighted average cost of capital of less than 8%.
URI in the second quarter of FY 19 has reported the adjusted earnings per share of $4.74, beating the analysts’ estimates for the adjusted earnings per share of $4.42, as per analysts polled by FactSet. The company had reported the adjusted revenue growth of 21 percent to $2.3 billion in the second quarter of FY 19, beating the analysts’ estimates for revenue of $2.3 billion Rental revenue was a second-quarter record at $1.960 billion, reflecting increases of 20.2% and 4.8% year-over-year on an as-reported and pro forma basis, respectively. The increase is mainly due to the impact of the BakerCorp and BlueLine acquisitions. The pro forma increase is primarily due to growth in the company’s construction end-markets.
United expects 2019 revenue between $9.15 billion and $9.45 billion, versus prior guidance of $9.15 billion and $9.55 billion.
Additionally, in June 2019, the company had lowered its targeted leverage range to 2.0x-3.0x, from 2.5x-3.5x, and expects to end the year with a net leverage ratio of approximately 2.5x. The company’s net leverage ratio was 2.8x at June 30, 2019