United Rentals Adjusts Guidance, Sending Stock Lower

From Greenwich, Conn., Monday morning, United Rentals (NYSE:URI) posted some new guidance for the remainder of calendar year 2012, directly in the wake of its acquisition of competitor RSC Holdings. The guidance, however, seems to be going over like a lead balloon, as the company’s stock dropped more than 2 percent initially before recovering to be down a little more than 1 percent to about $30 per share.

The company reported that it expects its 2012 revenue total to be in the range of $4.6 to $4.7 billion, which was expcted to be up from last year’s $4.1 billion , and expected earnings to be between $1.95 and $2 billion, which is well above last year’s $1.49 billion. The company said it was anticipating a 6.5-percent increase in rental rates from the same quarter of 2011 and was looking at a time utilization rate of 68 percent to go with free cash usage of $90-$140 million.

Compared to the numbers reported in Q2 2011, these numbers may look good to hedge funds like James Dinan’s York Capital Management and John Thaler’s JAT Capital Management. York jumped into URI stock during the first quarter of 2012, posting a $146 million play during the quarter, while JAT upped its stock hold in the company by 62 percent in the quarter to $133 million.