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ServiceMaster (SERV) Beats Q2 Earnings & Revenue Estimates

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ServiceMaster Global Holdings reported better-than-expected second-quarter 2020 results.

Adjusted earnings of 40 cents per share beat the consensus mark by 11.1%. Revenues of $534 million surpassed the consensus mark by 3.4%.

Revenues in Detail

Terminix revenues of $517 million increased 5% year over year.

Revenues of $17 million from European Pest Control and Other were impacted by coronavirus-related business closures, including severe disruptions in the United Kingdom.

Revenues from the ServiceMaster Brands Divestiture Group came in at $63 million, down 4% year over year. Growth in national accounts and enhanced cleaning and disinfection services was more than offset by mild winter and decline in area-wide events year over year in ServiceMaster Restore and coronavirus-related shutdown of Merry Maids locations.

Other Quarterly Numbers

Adjusted EBITDA of $119 million went up 14.4% year over year. Adjusted EBITDA margin of 22.4% improved 130 basis points year over year.

The company exited the quarter with cash and cash equivalent balance of $302 million compared with $185 million at the end of the prior quarter. Long-term debt of $1.62 billion was flat sequentially.

The company generated $117 million of net cash from operating activities. Free cash flow came in at $112 million.

Third-Quarter 2020 Guidance

For the third quarter, revenues are expected between $495 and $515 million. The Zacks Consensus Estimate of $490.91 million lies below the guidance.

Adjusted EBITDA is anticipated between $80 and $90 million.

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

Performance of Other Business Services Companies

Equifax (EFX - Free Report) reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, whichbeat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. The reported figure exceeded the guided range of 78-88 cents.

IQVIA Holdings (IQV - Free Report) reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis. The reported figure exceeded the guided range of $1.00-$1.09.

Robert Half (RHI - Free Report) reported second-quarter 2020 earnings of 41 cents per share that beat the consensus mark by 17% but were down 58% year over year.

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