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.
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.
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.
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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.
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.
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.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
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