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Republic Services (RSG) Q1 Earnings Beat Estimates, Rise Y/Y

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Republic Services, Inc. (RSG - Free Report) reported impressive first-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate.

Adjusted earnings (excluding 3 cents from non-recurring items) per share of $1.14 outpaced the consensus mark by 8.6% and rallied 16.3% year over year.  

Republic Services ' average recycled-commodity price per ton sold in the first quarter was $201, down $17 on a sequential basis but up $68 year over year.

So far this year, shares of Republic Services have gained 17.6% against a 21.6% decline of the industry it belongs to.

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Revenues

Quarterly revenues of $2.97 billion surpassed the consensus estimate by 2.4% and increased 14.3% year over year. RSG’s top line includes a favorable impact of 10.5% from internal growth and 3.9% from acquisitions/divestitures.

Revenues in the Collection segment totaled $2.17 billion, up 11.6% year over year. Revenues in the Transfer segment (net) amounted to $164.9 million, rising 12.8% year over year. Revenues in the Landfill segment (net) totaled $348.2 million, increasing 10.3% year over year. Environmental solutions segment revenues (net) of $99.3 million surged more than 100% year over year. Other segment revenues of $179.4 million increased 20.4% year over year.

Operating Results

Adjusted EBITDA margin of 30.4% declined 30 basis points (bps) from the prior-year quarter’s levels.

Operating income was $560.6 million, up 14% from the year-ago quarter’s levels. The operating margin declined marginally to 18.8% from  the year-ago quarter.

Republic Services, Inc. Price, Consensus and EPS Surprise

Republic Services, Inc. Price, Consensus and EPS Surprise

Republic Services, Inc. price-consensus-eps-surprise-chart | Republic Services, Inc. Quote

Total selling, general and administrative expenses were $307.8 million, up 16% from the year-ago quarter’s figure.

Balance Sheet and Cash Flow

Republic Services exited first-quarter 2022 with cash and cash equivalents of $39 million compared with $29 million at the end of the prior quarter.

Long-term debt (net of current maturities) was $9.61 billion compared with $9.55 billion at the end of the prior quarter.

RSG generated $705.6 million of cash from operating activities in the reported quarter.  The Adjusted free cash flow was $530.9 million.

In the March quarter of 2022, RSG returned $349.4 million of total cash to its shareholders (including $203.5 million of share repurchases and $145.9 million of dividends paid).

RSG announced a quarterly cash dividend of 46 cents per share, to be paid out on Jul 15 to its shareholders on record as of Jul 1.

During the reported quarter, RSG repurchased 1.6 million shares for $203.5 million at a weighted average cost per share of $124.02. As of Mar 31, 2022, the remaining authorized purchase capacity under RSG’s October 2020 repurchase program was $1.5 billion.

Currently, Republic Services carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshots

Within the broader Business Services sector, ManpowerGroup Inc. (MAN - Free Report) , Omnicom Group Inc. (OMC - Free Report) and Equifax Inc. (EFX - Free Report) recently reported first-quarter 2022 results.

ManpowerGroup reported impressive first-quarter 2022 results, with both earnings and revenues beating the Zacks Consensus Estimate. Quarterly adjusted earnings of $1.88 per share beat the consensus mark by 20.5% and improved 69.4% year over year. Revenues of $5.14 billion surpassed the consensus mark by 0.7% and inched up 4.5% year over year on a reported basis and 9.8% on a constant-currency (cc) basis.

Omnicom reported impressive first-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Earnings of $1.39 per share beat the consensus mark by 8.6% and increased 4.5% year over year, driven by a strong margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 5.4% but declined slightly year over year.

Equifax reported better-than-expected first-quarter 2022 results. Adjusted earnings of $2.22 per share beat the Zacks Consensus Estimate by 3.3% and improved 13% on a year-over-year basis. Revenues of $1.36 billion outpaced the consensus estimate by 2.4% and improved 12.4% year over year on a reported basis and 13% on a local-currency basis.
 

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