We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Cintas (CTAS) Down 1.4% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Cintas (CTAS - Free Report) . Shares have lost about 1.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cintas due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cintas Q4 Earnings & Revenues Beat Estimates, Up Y/Y
Cintas posted better-than-expected fourth-quarter fiscal 2019 (ended May 2019) results, with both earnings and revenues surpassing the Zacks Consensus Estimate.
Earnings/Revenues
Net income from continuing operations for the quarter jumped 19.5% to a record level of $226.2 million from $189.3 million in the year-ago quarter. Notably, adjusted earnings came in at $2.07 per share, up 16.9% year over year. Also, the bottom line surpassed the Zacks Consensus Estimate of $1.94.
Revenues increased 7.4% year over year to a record level of $1,793.7 million. The metric also improved 7.6% organically. Moreover, the top line surpassed the consensus estimate of $1,782 million.
For fiscal 2019, net income and earnings per share from continuing operations were $882.6 million and $7.97, respectively, compared with $783.9 million and $7.03 last fiscal. The company reported adjusted earnings of $7.60 per share for fiscal 2019. Revenues for the year were $6,892.3 million compared with $6,476.6 million in fiscal 2018. The increase was driven by an organic growth rate of 6.5%.
Segmental Breakup
The Uniform Rental and Facility Services segment generated revenues worth $1,428.4 million in the fiscal fourth quarter, up 6.4% year over year. First Aid and Safety Services segment’s top line improved 10.7% year over year to $163.5 million. Aggregate revenues from Other businesses came in at $201.8 million, up 12.7%.
Costs/Margins
Aggregate cost and expenses for the fiscal fourth quarter was $1,479.3 million, up 5.4% year over year. Gross profit margin improved 80 basis points (bps) to 45.9%.
Selling and administrative expenses were up 7.7% year over year to $508.2 million in the reported quarter. Integration expenses related to G&K Services, Inc. (acquired in March 2017) declined 93.9% year over year to $0.9 million. Operating margin in the reported quarter was 17.5%, up 160 bps.
Balance Sheet/Cash Flow
At the end of the fiscal fourth quarter, cash and cash equivalents came in at $96.6 million compared with $138.7 million at the end of prior fiscal year. Total long-term liabilities increased to $3,306.2 million from $3,165.8 million recorded a year ago.
For fiscal 2019, the company generated $1,067.8 million cash from operating activities, up 10.8% year over year. Capital expenditures were $276.8 million, up 1.9% year over year.
In fiscal 2019, Cintas repurchased common stock worth $1,016.3 million under its buyback program. Notably, the company paid an annual dividend of $220.8 million during fiscal 2019.
Outlook
For fiscal 2020 (ending May 2020), revenues are expected in the range of $7.24-$7.31 billion while earnings from continuing operations are expected to be between $8.30 and $8.45 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Cintas has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cintas has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Cintas (CTAS) Down 1.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Cintas (CTAS - Free Report) . Shares have lost about 1.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cintas due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cintas Q4 Earnings & Revenues Beat Estimates, Up Y/Y
Cintas posted better-than-expected fourth-quarter fiscal 2019 (ended May 2019) results, with both earnings and revenues surpassing the Zacks Consensus Estimate.
Earnings/Revenues
Net income from continuing operations for the quarter jumped 19.5% to a record level of $226.2 million from $189.3 million in the year-ago quarter. Notably, adjusted earnings came in at $2.07 per share, up 16.9% year over year. Also, the bottom line surpassed the Zacks Consensus Estimate of $1.94.
Revenues increased 7.4% year over year to a record level of $1,793.7 million. The metric also improved 7.6% organically. Moreover, the top line surpassed the consensus estimate of $1,782 million.
For fiscal 2019, net income and earnings per share from continuing operations were $882.6 million and $7.97, respectively, compared with $783.9 million and $7.03 last fiscal. The company reported adjusted earnings of $7.60 per share for fiscal 2019. Revenues for the year were $6,892.3 million compared with $6,476.6 million in fiscal 2018. The increase was driven by an organic growth rate of 6.5%.
Segmental Breakup
The Uniform Rental and Facility Services segment generated revenues worth $1,428.4 million in the fiscal fourth quarter, up 6.4% year over year. First Aid and Safety Services segment’s top line improved 10.7% year over year to $163.5 million. Aggregate revenues from Other businesses came in at $201.8 million, up 12.7%.
Costs/Margins
Aggregate cost and expenses for the fiscal fourth quarter was $1,479.3 million, up 5.4% year over year. Gross profit margin improved 80 basis points (bps) to 45.9%.
Selling and administrative expenses were up 7.7% year over year to $508.2 million in the reported quarter. Integration expenses related to G&K Services, Inc. (acquired in March 2017) declined 93.9% year over year to $0.9 million. Operating margin in the reported quarter was 17.5%, up 160 bps.
Balance Sheet/Cash Flow
At the end of the fiscal fourth quarter, cash and cash equivalents came in at $96.6 million compared with $138.7 million at the end of prior fiscal year. Total long-term liabilities increased to $3,306.2 million from $3,165.8 million recorded a year ago.
For fiscal 2019, the company generated $1,067.8 million cash from operating activities, up 10.8% year over year. Capital expenditures were $276.8 million, up 1.9% year over year.
In fiscal 2019, Cintas repurchased common stock worth $1,016.3 million under its buyback program. Notably, the company paid an annual dividend of $220.8 million during fiscal 2019.
Outlook
For fiscal 2020 (ending May 2020), revenues are expected in the range of $7.24-$7.31 billion while earnings from continuing operations are expected to be between $8.30 and $8.45 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Cintas has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cintas has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.