GREENWICH, Conn. (AP) -- United Rentals Inc.'s shares jumped in after-hours trading Tuesday after the heavy-equipment-rental company posted a first-quarter profit that easily topped Wall Street's expectations.
The company, based in Greenwich, has been hit in the past few years by the weak construction industry. The early stages of a construction recovery and the recent trend toward renting, rather than owning, equipment appears to be paying off for the company now.
United said that its rental revenue rose 20.5 percent in the quarter, reflecting a 6.3 percent increase in rental rates and an 18.4 percent increase in rental volume. It also sold $76 million worth of used equipment, more than double what it sold in the prior year.
That helped the company deliver net income of $13 million, or 17 cents per share, for the quarter that ended March 31. That's compared with a net loss of $20 million, or 34 cents per share, in the same quarter last year. After adjusting restructuring and acquisition costs, along with other special items, it earned 36 cents per share versus 32 cents per share.
United's revenue increased nearly 21 percent to $656 million.
Analysts polled by FactSet anticipated that the company would posted adjusted earnings of 5 cents per share on revenue of $609.9 million.
"Once again we drove profitable growth faster than the construction recovery," CEO Michael Kneeland said in a statement. "These results speak volumes about the effectiveness of our strategy and the ongoing secular shift toward renting."
United also said that its $1.9 billion acquisition of RSC Holdings Inc., which it announced in December, will be complete April 30.
Shares of the company rose 61 cents to close at $40.91 but jumped $2.96, more nearly 8 percent, to $44.10 in after-hours trading on the earnings report.