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Stericycle (SRCL) Stock Up 4.6% Owing to Q1 Earnings Beat
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Stericycle, Inc. (SRCL - Free Report) reported impressive first-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate. Moreover, better-than-expected results impressed the market as the stock price moved up 4.6% since the earnings release.
Adjusted earnings per share (excluding 43 cents from non-recurring items) of 71 cents beat the Zacks Consensus Estimate by 20.3% and increased 36.5% year over year. The upside can be attributed to higher adjusted income from operations, lower interest expenses and net favorable impact from foreign exchange rates. These were partially offset by unfavorable impact from divestitures.
Revenues of $668 million beat the consensus mark by 2.1% and declined 14.9% year over year. The downfall was due to divestitures that hurt revenues by $135 million and lower Secure Information Destruction that impacted revenues by $26.8 million. However, these declines were partially offset by marginal increase in organic revenue and positive impact of foreign exchange rates.
Notably, Stericycle’s shares have gained 65.3% in the past year compared 39.5% increase of the industry it belongs to.
Let’s delve deeper into the numbers
Revenues by Service
Regulated Waste and Compliance Services revenues fell 16.5% year over year on a reported basis, but increased 6% on an organic basis to $473.6 million. The segment contributed 70.9% to total revenues.
Secure Information Destruction revenues declined 10.9% year over year on a reported basis and 12.3% organically to $194.4 million. The segment contributed 29.1% to total revenues.
Revenues by Geography
Revenues from North America were $533.7 million, down 18.5% year over year on a reported basis and 0.3% organically. The region contributed 79.9% of total revenues.
International revenues of $134.3 million increased 3% year over year on a reported basis and 7.2% organically. The region contributed 20.1% of total revenues.
Stericycle, Inc. Price, Consensus and EPS Surprise
Adjusted gross profit in the reported quarter amounted to $261.4 million compared with $286.6 million in the year-ago quarter. Adjusted gross profit margin was 39.1%, up from 36.5% in the prior-year quarter.
Adjusted operating income was $110 million compared with $93.8 million in the year-ago quarter. Adjusted operating income margin was 16.5%, up from 11.9% in the prior-year quarter.
Adjusted EBITDA was $135.2 million compared with $121.2 million in the year-ago quarter. Adjusted EBITDA margin was 20.2%, up from 15.4% in the prior-year quarter.
Balance Sheet & Cash Flow
Stericycle exited the quarter with cash and cash equivalents of $50 million compared with $53.3 million at the end of the prior quarter. Long-term debt was $1.65 billion compared with $1.68 billion at the end of the prior quarter. The company generated $62.6 million of net cash from operating activities and capex was $24.7 million in the quarter. Free cash flow of $37.9million was generated in the quarter.
Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and increased on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus mark by 7.9% and rose 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
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Stericycle (SRCL) Stock Up 4.6% Owing to Q1 Earnings Beat
Stericycle, Inc. (SRCL - Free Report) reported impressive first-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate. Moreover, better-than-expected results impressed the market as the stock price moved up 4.6% since the earnings release.
Adjusted earnings per share (excluding 43 cents from non-recurring items) of 71 cents beat the Zacks Consensus Estimate by 20.3% and increased 36.5% year over year. The upside can be attributed to higher adjusted income from operations, lower interest expenses and net favorable impact from foreign exchange rates. These were partially offset by unfavorable impact from divestitures.
Revenues of $668 million beat the consensus mark by 2.1% and declined 14.9% year over year. The downfall was due to divestitures that hurt revenues by $135 million and lower Secure Information Destruction that impacted revenues by $26.8 million. However, these declines were partially offset by marginal increase in organic revenue and positive impact of foreign exchange rates.
Notably, Stericycle’s shares have gained 65.3% in the past year compared 39.5% increase of the industry it belongs to.
Let’s delve deeper into the numbers
Revenues by Service
Regulated Waste and Compliance Services revenues fell 16.5% year over year on a reported basis, but increased 6% on an organic basis to $473.6 million. The segment contributed 70.9% to total revenues.
Secure Information Destruction revenues declined 10.9% year over year on a reported basis and 12.3% organically to $194.4 million. The segment contributed 29.1% to total revenues.
Revenues by Geography
Revenues from North America were $533.7 million, down 18.5% year over year on a reported basis and 0.3% organically. The region contributed 79.9% of total revenues.
International revenues of $134.3 million increased 3% year over year on a reported basis and 7.2% organically. The region contributed 20.1% of total revenues.
Stericycle, Inc. Price, Consensus and EPS Surprise
Stericycle, Inc. price-consensus-eps-surprise-chart | Stericycle, Inc. Quote
Profitability Performance
Adjusted gross profit in the reported quarter amounted to $261.4 million compared with $286.6 million in the year-ago quarter. Adjusted gross profit margin was 39.1%, up from 36.5% in the prior-year quarter.
Adjusted operating income was $110 million compared with $93.8 million in the year-ago quarter. Adjusted operating income margin was 16.5%, up from 11.9% in the prior-year quarter.
Adjusted EBITDA was $135.2 million compared with $121.2 million in the year-ago quarter. Adjusted EBITDA margin was 20.2%, up from 15.4% in the prior-year quarter.
Balance Sheet & Cash Flow
Stericycle exited the quarter with cash and cash equivalents of $50 million compared with $53.3 million at the end of the prior quarter. Long-term debt was $1.65 billion compared with $1.68 billion at the end of the prior quarter.
The company generated $62.6 million of net cash from operating activities and capex was $24.7 million in the quarter. Free cash flow of $37.9million was generated in the quarter.
Currently, Stericycle 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’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and increased on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus mark by 7.9% and rose 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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