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Republic Services (RSG) Beats on Q3 Earnings, Raises '21 View
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Republic Services, Inc. (RSG - Free Report) reported impressive third-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate.
Adjusted earnings (excluding a penny from non-recurring items) per share of $1.11 outpaced the consensus mark by 7.8% and rallied 11% year over year. The company's average recycled-commodity price per ton sold in the third quarter was $230, up $60 per ton on a sequential basis and $131 year over year.
So far this year, shares of Republic Services have gained 34.9% against a 4.2% loss of the industry it belongs to.
Image Source: Zacks Investment Research
Revenues
Quarterly revenues of $2.93 billion surpassed the consensus estimate by 3.9% and increased 14.1% year over year. The company’s top line includes a favorable impact of 10.6% from internal growth and 3.5% from acquisitions.
Revenues in the Collection segment totaled $2.1 billion, up 11.2% year over year. Net revenues in the Transfer segment amounted to $182.7 million, rising 13.1% year over year. Net revenues in the Landfill segment totaled $372 million, increasing 11.4% year over year. Environmental solutions segment revenues of $51.4 million surged more than 100% year over year. Other segment revenues of $192.2 million increased 46.2% year over year.
Operating Results
Adjusted EBITDA margin of 30.4% improved 10 basis points (bps) from the prior-year quarter’s levels.
Republic Services, Inc. Price, Consensus and EPS Surprise
Operating income was $564.2 million, up 26% from the year-ago quarter’s levels. The operating margin rose to 19.2% from 17.4% in the year-ago quarter.
Total selling, general and administrative expenses were $299 million, up 16.8% from the year-ago quarter’s figures.
Balance Sheet and Cash Flow
Republic Services exited third-quarter 2021 with cash and cash equivalents of $40.1 million compared with $34 million at the end of the prior quarter.
Long-term debt (net of current maturities) was $9.26 billion compared with $8.83 billion at the end of the prior quarter.
The company generated $655 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $346.9 million.
In July 2021, the company paid out $135.4 million of cash dividend to shareholders on record as of Jul 1, 2021. As of Sep 30, 2021, the company’s quarterly payable dividend was $146.1 million to shareholders on record as of Oct 1, 2021. The dividend was paid out on Oct 15, 2021.
During the reported quarter, the company repurchased 1 million shares for $123.3 million. As of Sep 30, 2021, the company had $1.8 billion available under its October 2020 repurchase program.
Raised 2021 Guidance
Republic raised its full-year adjusted earnings per share (EPS) and adjusted free cash flow guidance.
Adjusted EPS is projected between $4.10 and $4.13 compared with the prior guidance of $4.00 and $4.05. The Zacks Consensus Estimate of $4.06 lies below the updated guidance.
The company now expects to generate $1.475 billion to $1.5 billion of adjusted free cash flow compared with the prior guidance of $1.45 billion to $1.475 billion.
Equifax’s (EFX - Free Report) third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6%. The bottom line declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6%. The top line increased 14.5% year over year on a reported basis and 14% on a local-currency basis.
IQVIA’s (IQV - Free Report) third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and rose 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1%. The top line increased 21.7% year over year on a reported basis and 21.1% on a constant-currency basis.
Omnicom’s (OMC - Free Report) third-quarter 2021 adjusted earnings of $1.65 per share beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.
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Republic Services (RSG) Beats on Q3 Earnings, Raises '21 View
Republic Services, Inc. (RSG - Free Report) reported impressive third-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate.
Adjusted earnings (excluding a penny from non-recurring items) per share of $1.11 outpaced the consensus mark by 7.8% and rallied 11% year over year.
The company's average recycled-commodity price per ton sold in the third quarter was $230, up $60 per ton on a sequential basis and $131 year over year.
So far this year, shares of Republic Services have gained 34.9% against a 4.2% loss of the industry it belongs to.
Image Source: Zacks Investment Research
Revenues
Quarterly revenues of $2.93 billion surpassed the consensus estimate by 3.9% and increased 14.1% year over year. The company’s top line includes a favorable impact of 10.6% from internal growth and 3.5% from acquisitions.
Revenues in the Collection segment totaled $2.1 billion, up 11.2% year over year. Net revenues in the Transfer segment amounted to $182.7 million, rising 13.1% year over year. Net revenues in the Landfill segment totaled $372 million, increasing 11.4% year over year. Environmental solutions segment revenues of $51.4 million surged more than 100% year over year. Other segment revenues of $192.2 million increased 46.2% year over year.
Operating Results
Adjusted EBITDA margin of 30.4% improved 10 basis points (bps) from the prior-year quarter’s levels.
Republic Services, Inc. Price, Consensus and EPS Surprise
Republic Services, Inc. price-consensus-eps-surprise-chart | Republic Services, Inc. Quote
Operating income was $564.2 million, up 26% from the year-ago quarter’s levels. The operating margin rose to 19.2% from 17.4% in the year-ago quarter.
Total selling, general and administrative expenses were $299 million, up 16.8% from the year-ago quarter’s figures.
Balance Sheet and Cash Flow
Republic Services exited third-quarter 2021 with cash and cash equivalents of $40.1 million compared with $34 million at the end of the prior quarter.
Long-term debt (net of current maturities) was $9.26 billion compared with $8.83 billion at the end of the prior quarter.
The company generated $655 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $346.9 million.
In July 2021, the company paid out $135.4 million of cash dividend to shareholders on record as of Jul 1, 2021. As of Sep 30, 2021, the company’s quarterly payable dividend was $146.1 million to shareholders on record as of Oct 1, 2021. The dividend was paid out on Oct 15, 2021.
During the reported quarter, the company repurchased 1 million shares for $123.3 million. As of Sep 30, 2021, the company had $1.8 billion available under its October 2020 repurchase program.
Raised 2021 Guidance
Republic raised its full-year adjusted earnings per share (EPS) and adjusted free cash flow guidance.
Adjusted EPS is projected between $4.10 and $4.13 compared with the prior guidance of $4.00 and $4.05. The Zacks Consensus Estimate of $4.06 lies below the updated guidance.
The company now expects to generate $1.475 billion to $1.5 billion of adjusted free cash flow compared with the prior guidance of $1.45 billion to $1.475 billion.
Currently, Republic Services carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax’s (EFX - Free Report) third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6%. The bottom line declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6%. The top line increased 14.5% year over year on a reported basis and 14% on a local-currency basis.
IQVIA’s (IQV - Free Report) third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and rose 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1%. The top line increased 21.7% year over year on a reported basis and 21.1% on a constant-currency basis.
Omnicom’s (OMC - Free Report) third-quarter 2021 adjusted earnings of $1.65 per share beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.