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Stericycle (SRCL) Q3 Earnings Miss Estimates, Stock Drops 5%

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Stericycle, Inc.‘s (SRCL - Free Report) third-quarter 2021 earnings and revenues missed the Zacks Consensus Estimate. The stock dropped 5%, since the date of earnings release on Nov 2, in response to lower-than-expected results.

Earnings per share (excluding $1.16 from non-recurring items) of 44 cents missed the Zacks Consensus Estimate by 22.8% and declined 35.3% year over year. The downside can be attributed to lower operating performance.

Revenues of $648.9 million also missed the consensus mark by 2.8%, but moved up 2% year over year on the back of higher Regulated Waste and Compliance Services revenues. These were partially offset by the impact of divestitures.

In the past year, shares of Stericycle have lost 15.2% compared with a 8.5% decline of the industry it belongs to.

Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s check the numbers in detail.

Revenues by Service

Regulated Waste and Compliance Services revenues increased 2.8% year over year on a reported basis and 6.8% on an organic basis to $461.7 million. The segment contributed 71.2% to total revenues.

Secure Information Destruction revenues dropped marginally year over year on a reported basis and 1.1% organically to $187.2 million. The segment contributed 28.8% to total revenues.

Revenues by Geography

Revenues from North America were $523.9 million, up 1.3% year over year on a reported basis and 3.6% organically. International revenues of $125 million increased 4.8% year over year on a reported basis and 7.9%, organically.

Stericycle, Inc. Price, Consensus and EPS Surprise

 

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 $239.7 million, down 10.3% from the year-ago quarter’s levels. Adjusted gross profit margin was 36.9%, down from 42% in the prior-year quarter.

Adjusted operating income was $72.5 million, down 28.2% from the year-ago quarter’s levels. Adjusted operating income margin was 11.2%, down from 15.9% in the prior-year quarter.

Adjusted EBITDA was $99.9 million, down 21.2% from the year-ago quarter’s figure. Adjusted EBITDA margin was 15.4%, up from 19.9% in the prior-year quarter.

Balance Sheet & Cash Flow

Stericycle exited third-quarter 2021 with cash and cash equivalents of $37.5 million compared with $61.7 million at the end of the prior quarter. Long-term debt was $1.62 billion compared with $1.60 billion at the end of the prior quarter.

The company generated $52.4 million of net cash from operating activities and capex was $26.1 million in the quarter. Free cash flow came in at $101.5 million in the quarter.

Currently, Stericycle carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Outlook

For 2021, the company anticipates capital expenditures in the range of $110-$120 million (previous outlook: $140-$160 million).

For the fourth quarter of 2021, the company expects low single-digit year-over-year consolidated organic revenue growth rate. Free cash flow generation is expected to be least $45 million.

Performance of Some 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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