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Republic Services Beats on Q2 Earnings, Guidance Up

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Republic Services, Inc (RSG - Free Report) reported GAAP net income of $190.3 million or 54 cents per share in second-quarter 2015 versus $179.0 million or 50 cents per share in the year-ago quarter. The reported earnings beat the Zacks Consensus Estimate by  3 cents. The year-over-year increase in earnings was primarily attributable to higher revenues.  
 

 

 

Top-Line Performance

Revenues stood at $2,311.4 million in the reported quarter, up from $2,229.2 million in the prior-year period. The year-over-year increase was driven by a 2.4% rise in average yield and a 1.1% increase in volume. Revenues for second-quarter 2015 beat the Zacks Consensus Estimate of $2,300 million.

EBITDA for the reported quarter stood at $654.8 million versus $628.0 million in the year-ago quarter. The increase was driven by lower fuel costs and expansion in the solid waste business, offset by continued headwinds in the recycling business. Give adjusted ebitda Adjusted EBITDA margin was consistent with the prior-year period at 28.3% of revenue.

Segment Details

Revenues from the Collection segment increased 3.7% year over year to $1,755 million as all its sub-segments, namely Residential, Commercial, and Industrial fared relatively better in the reported quarter. The Transfer segment revenues improved 5.9% year over year to $113.9 million. Revenues from the Landfill segment were up 3.3% to $281.1 million, while sales from the Other segment declined 9.5% year over year to $134.4 million.

By the end of the reported quarter, about 15% of the total fleet was operating on natural gas. Approximately 70% of the residential fleet was automated and 70% of the fleet was certified under the standardized maintenance program.

Balance Sheet & Cash Flow

Cash and cash equivalents at quarter end were $99.9 million, while long-term debt (net of current maturities) stood at $7,547.5 million.

Cash from operating activities totalled $901.2 for the reported quarter compared with $722.3 million in the prior-year period. Adjusted free cash flow for the six months ended Jun 30, 2015 stood at $409.6 million versus $246.6 million in the year-earlier period

Republic Services approved a 7.1% increase in quarterly dividend. The quarterly dividend of 30 cents per share will be paid on Oct. 15, 2015.

Share Repurchase

During second quarter 2015, the company repurchased 2.9 million shares for $113.3 million at an average price of $40.21 per share. As of Jun 30, 2015, the company had 349.3 million shares of common stock issued and outstanding.

Moving Forward

Republic Services expects full year EPS to be in a range of $2.02 to $2.05, up from the prior range of $1.98 to $2.04. The company expects full-year adjusted free cash flow to be in a range of $720 million to $745 million up from the prior range of $710 million to $740 million.

Republic Services currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look now include Gartner Inc (IT - Free Report) , Clean Harbors, Inc. (CLH - Free Report)   and US Ecology, Inc (ECOL - Free Report)   having a Zacks Rank #2 (Buy).

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