NEW YORK (AP) -- Shares of United Rentals Inc. rose in premarket trading Wednesday after the equipment rental company reported strong earnings in the first three months of the year, typically the company's slowest quarter.
United Rentals, hurt by the downturn in construction during and after the recession, said it is benefiting from a shift toward renting, rather than owning, equipment. The company's supplies include construction equipment such as backhoes and forklifts, water pumps and generators, and other tools.
The Greenwich, Conn., company said late on Tuesday that it earned 36 cents per share, excluding restructuring and acquisition costs, in the quarter ended March 31. That was well ahead of the average analyst estimate of 5 cents per share, according to a survey by FactSet. Revenue increased 25 percent and also topped estimates.
The company expects to complete its $2.12 billion acquisition of RSC Holdings Inc. by the end of the month and repeated that it expects the deal to aid growth and lead to more than $200 million in cost savings.
KeyBanc analyst Joe Box said better-than-expected fleet growth and greater fleet sales helped United Rentals top expectations. He maintained a "Buy" rating and $50 price target, saying that rental equipment sales will benefit from a recovery in the construction industry. He said he thinks the country is in the "very early stages" of such a rebound.
The stock traded at $44.50 in the premarket, up $3.59, or 8.8 percent. Over the past year the stock has traded between $12.81 and $45.08.