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Stericycle (SRCL) Q1 Earnings Miss Estimates, Decrease Y/Y

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Stericycle, Inc.’s (SRCL - Free Report) first-quarter 2022 earnings and revenues missed the Zacks Consensus Estimate.  

Quarterly EPS (excluding 47 cents from non-recurring items) of 32 cents missed the Zacks Consensus Estimate by 27.3% and declined 54.9% year over year. The downside was due to higher supply chain, labor and other inflationary costs as well as higher ongoing IT operating expenditures, higher selling costs and bad debt expenses.

Revenues of $664.2 million also missed the consensus mark by 0.6% and decreased slightly year over year due to lower Regulated Waste and Compliance Services organic revenues, impact of divestitures and unfavorable foreign exchange rates. Organic revenues increased 2.1% year over year.

In the past year, shares of Stericycle have lost 32.1% compared with the 15.8% decline of the industry it belongs to.

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Revenues by Service

Regulated Waste and Compliance Services revenues decreased 4.4% year over year on a reported basis and 1% on an organic basis to $452.6 million. The segment contributed 68.2% to total revenues.

Secure Information Destruction revenues increased 8.8% year over year on a reported basis and 9.5% organically to $211.6 million. The segment contributed 31.9% to total revenues.

Revenues by Geography

Revenues from North America were $543.7 million, up 1.9% year over year on a reported basis and 2.8% organically. International revenues of $120.5 million dropped 10.3% year over year on a reported basis while the organic decline was marginal.

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 quarter amounted to $244.5 million, down 6.5% from the year-ago quarter’s level. Adjusted gross profit margin was 36.8%, down from 39.1% in the prior-year quarter.

Adjusted EBITDA was $86.3 million, down 36.2% from the year-ago quarter’s figure. Adjusted EBITDA margin was 13%, down from 20.2% in the prior-year quarter.

Adjusted operating income was $59 million, down 46.4% from the year-ago quarter’s levels. Adjusted operating income margin was 8.9%, down from 16.5% in the prior-year quarter.

Balance Sheet & Cash Flow

Stericycle exited the reported quarter with cash and cash equivalents of $59.6 million compared with $55.6 million at the end of the prior quarter. Long-term debt was $1.68 billion compared with $1.59 billion reported in the prior quarter.

SRCL generated $38.8 million of net cash from operating activities while capex was $37.5 million in the quarter. Free cash flow came in at $76.3 million in the quarter.

2022 Outlook

For 2022, Stericycle anticipates organic revenue growth of 3-5%. Adjusted EPS is expected in the range of $2-$2.3, the midpoint ($2.15) of which is lower than the current Zacks Consensus Estimate of $2.29. SRCL expects capital expenditures in the range of $120-$140 million, and free cash flow to be $125-$155 million.

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

Earnings Snapshots

Within the broader Business Services sector, ManpowerGroup Inc. (MAN - Free Report) , Omnicom Group Inc. (OMC - Free Report) and Equifax Inc. (EFX - Free Report) recently reported first-quarter 2022 results.

ManpowerGroup reported impressive first-quarter 2022 results, with both earnings and revenues beating the Zacks Consensus Estimate. Quarterly adjusted earnings of $1.88 per share beat the consensus mark by 20.5% and improved 69.4% year over year. Revenues of $5.14 billion surpassed the consensus mark by 0.7% and inched up 4.5% year over year on a reported basis and 9.8% on a constant-currency (cc) basis.

Omnicom reported impressive first-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Earnings of $1.39 per share beat the consensus mark by 8.6% and increased 4.5% year over year, driven by a strong margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 5.4% but declined slightly year over year.

Equifax reported better-than-expected first-quarter 2022 results. Adjusted earnings of $2.22 per share beat the Zacks Consensus Estimate by 3.3% and improved 13% on a year-over-year basis. Revenues of $1.36 billion outpaced the consensus estimate by 2.4% and improved 12.4% year over year on a reported basis and 13% on a local-currency basis.
 


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