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United Rentals, Inc. URI reported lower-than-expected fourth-quarter 2025 results, with adjusted earnings per share (EPS) and total revenues both missing the Zacks Consensus Estimate. On a year-over-year basis, the top line grew while the bottom line tumbled.
The company’s fourth-quarter revenues improved year over year due to increased fleet productivity and strong demand across construction and industrial end markets. Growth in both general rentals and specialty segments supported the results. Customer optimism and healthy backlogs contributed to the overall strength.
Going forward, United Rentals expects to see continued growth in large projects and strong performance in the specialty segment. Moreover, it aims to maintain focus on execution through its market approach, technology offerings and disciplined capital allocation. Owing to the positive trends, URI’s board of directors hiked the quarterly dividend payment by 10% to $1.97 per share ($7.88 per share annually).
URI stock declined 4.6% during yesterday’s after-hours trading session.
Adjusted EPS of $11.09 missed the Zacks Consensus Estimate of $11.90 by 6.8%. The reported figure decreased 4.3% from the prior-year adjusted figure of $11.59 per share.
Total revenues were $4.21 billion in the quarter, missing the consensus mark of $4.26 billion by 1.1%. On a year-over-year basis, the top line grew 2.8%.
United Rentals, Inc. price-consensus-eps-surprise-chart | United Rentals, Inc. Quote
Equipment Rentals’ revenues increased 4.6% from the year-ago quarter to $3.58 billion. Fleet productivity inched up 0.5% year over year. Average original equipment at cost increased 4.5% year over year.
Used equipment sales (or sales of rental equipment) declined 14.6% from a year ago to $386 million. This produced an adjusted gross margin of 47.2%, which contracted 170 basis points (bps).
General Rentals: This segment registered 2.5% year-over-year growth in revenues of $2.4 billion. Conversely, rental gross margin contracted 120 bps year over year to 36.2%, indicating the impact of inflation and normal cost variability, alongside increased depreciation expense.
Specialty: Segmental revenues improved 9.2% year over year to a fourth-quarter record of $1.18 billion. Rental gross margin, however, contracted 520 bps year over year to 40.3%, indicating higher depreciation expense, increased delivery costs and changes in revenue mix driven by growth in lower-margin ancillary revenues.
The company’s total equipment rentals’ gross margin contracted 240 bps year over year to 37.6%.
Adjusted EBITDA for the reported period inched up 0.1% year over year to $1.901 billion. However, the adjusted EBITDA margin contracted 120 bps to 45.2%. This decline primarily stemmed from a decreased rental and used equipment sales gross margin.
Total revenues of $16.1 billion grew 4.9% year over year, while adjusted EPS declined 2.6% to $42.06.
In the full year, adjusted EBITDA improved 2.3% year over year to $7.33 billion, but the adjusted EBITDA margin contracted 120 bps.
United Rentals had cash and cash equivalents of $459 million as of Dec. 31, 2025, up from $457 million at 2024-end. Total liquidity was $3.322 billion at the fourth-quarter end. Long-term debt as of the fourth quarter was $12.65 billion, up from $12.23 billion at 2024-end.
As of Dec. 31, 2025, the net leverage ratio was 1.9x. Return on invested capital was 11.7% for the trailing 12 months ended on Dec. 31, 2025.
During 2025, net cash from operating activities was $5.19 billion, up from $4.55 billion in 2024. Free cash flow increased 6% year over year to $2.18 billion in 2025.
During 2025, URI returned $2.364 billion to its shareholders, including $1.9 billion through share repurchases and $464 million through dividend payments. In 2025, it also completed its previous $1.5 billion share repurchase program and launched a new $1.5 billion program, which was later raised to $2 billion following new federal tax legislation in July 2025.
Total revenues are expected to be in the range of $16.8-$17.3 billion. Adjusted EBITDA is expected to be between $7.575 billion and $7.825 billion.
Net rental capital expenditure is anticipated to be in the range of $2.85-$3.25 billion (after gross purchases of $4.3-$4.7 billion) compared with $2.776 billion after gross purchases of $4.189 billion in 2025.
Net cash provided by operating activities is anticipated to be in the range of $5.3-$6.1 billion. Free cash flow (excluding the impact of merger and restructuring-related payments) is expected to be in the range of $2.15-$2.45 billion.
Currently, United Rentals carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
D.R. Horton, Inc. DHI reported better-than-expected first-quarter fiscal 2026 (ended Dec. 31, 2025) results, with earnings and total revenues beating the Zacks Consensus Estimate. However, on a year-over-year basis, both metrics declined.
The continued housing market softness due to declining consumer confidence and affordability concerns marred the company’s quarterly performance, resulting in lower home closings. D.R. Horton expects affordability constraints and cautious consumer sentiment to continue to impact new housing demand. It expects consolidated revenues to be in the range of $33.5-$35 billion, with homes closed within 86,000-88,000.
KB Home KBH reported fourth-quarter fiscal 2025 results. The quarter’s earnings and total revenues surpassed the Zacks Consensus Estimate but decreased on a year-over-year basis.
KB Home’s quarterly performance remained under pressure amid a challenging economic and geopolitical environment, with low consumer confidence, affordability concerns and a still-high mortgage rate continuing to constrain demand. In response to these headwinds, management has adopted a measured outlook for the first quarter and full fiscal year 2026. For the first quarter of fiscal 2026, the company is expecting housing revenues to be in the $1.05-$1.15 billion band, down from $1.39 billion reported in the year-ago period. It expects deliveries to be in the range of 2,300-2,500 homes compared with 2,770 homes delivered in the year-ago period.
Lennar Corporation LEN reported mixed results for the fourth quarter of fiscal 2025, wherein its adjusted earnings missed the Zacks Consensus Estimate, while total revenues beat the same. Meanwhile, both metrics tumbled on a year-over-year basis.
Lennar’s quarterly performance was hurt by a still-challenging housing market, as affordability issues and buyer uncertainty kept demand weak. A six-week government shutdown and softer market conditions added further pressure. In response, the company remained focused on maintaining volumes, adapting to evolving conditions, reducing costs and supporting long-term housing demand rather than reacting to short-term volatility. For the first quarter of fiscal 2026, Lennar expects deliveries to be in the range of 17,000-18,000 homes compared with 17,834 homes delivered in the year-ago period.
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This article originally published on Zacks Investment Research (zacks.com).
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