Herc upgrades guidance as mega-projects exceed expectations

Herc Rentals has become the third major US rental business to increase its full-year outlook – after United Rentals and EquipmentShare – as “robust” mega-project activity continued to drive rental revenues.

Days after announcing its CEO succession plan – with current president Aaron Birnbaum to succeed Larry Silber as CEO at the start of 2027 – the company reported total revenues up 5% to US$1.36 billion and rental revenues 12% higher at $1.25 billion.

The company has upped its outlook for the year, with total revenues expected to be in the $4.47-4.55 billion range (up from $4.37-4.47 billion). Total spending on its rental fleet is now expected to be between $1.45 and $1.6 billion, and increase from $1.25-$1.4 billion.

(Photo: Herc Rentals)

Larry Silber, CEO, described the third quarter as exceptional and said customer demand was accelerating; “Equipment rental revenue increased 12% on an average OEC fleet that increased less than 2%, resulting in a 360 basis point improvement in dollar utilization.”

Major project pileline

He said volumes on mega-projects, including data centres, was robust and the growth in its pipeline of major projects was exceeding expectations; “[there are] expanding opportunities across data centres, infrastructure, manufacturing facilities and energy projects.”

The company’s performance was driven not just by mega-project volume but also by a double-digit increase in its specialty rentals business.

Silber added; “Revenue synergies from H&E were an increasing contributor in the quarter, consistent with the second-half weighting we previously outlined, as new specialty branches continued to ramp and we advanced cross-selling, broader fleet access and national account penetration.”