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Republic Services (RSG) Q4 Earnings Beat Estimates, Up Y/Y

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Republic Services, Inc. (RSG - Free Report) reported impressive fourth-quarter 2022 results, with both earnings and revenues surpassing the respective Zacks Consensus Estimate.

Adjusted earnings (excluding 4 cents from non-recurring items) per share of $1.13 outpaced the Zacks Consensus Estimate by 10.8% and improved 10.8% year over year.  

Republic Services' average recycled commodity price per ton sold during the fourth quarter was $88. This represents a decrease from the third quarter of 2022 of $74 per ton and a decrease of $130 per ton over the prior year.

Republic Services, Inc. Price, Consensus and EPS Surprise

 

Republic Services, Inc. Price, Consensus and EPS Surprise

Republic Services, Inc. price-consensus-eps-surprise-chart | Republic Services, Inc. Quote

 

Revenues

Quarterly revenues of $3.53 billion surpassed the Zacks Consensus Estimate by 2% and increased 19.5% year over year. Total internal growth plunged 16.2%, while revenues from acquisition surged more than 100%.

Revenues from Collection totaled $2.41 billion, up 12.6% year over year. Revenues (net) in the Transfer and Landfill segments amounted to $178.7 million and $382 million, rising 4.5% and 5.3%, respectively, year over year. Environmental solutions’ revenues (net) of $417.4 million surged more than 100% year over year.

Other segment’s revenues of $142.6 million declined 22.5% year over year.

Operating Results

Adjusted EBITDA margin of 27.3% declined 80 basis points from the prior-year quarter’s levels.

Operating income was $577.2 million, up 15.1% from the year-ago quarter’s levels. The operating income margin declined to 16.35% from the year-ago quarter’s figure of 16.98%.

Total selling, general and administrative expenses were $395.3 million, up 25.3% from the year-ago quarter’s figure.

Balance Sheet and Cash Flow

Republic Services exited fourth-quarter 2022 with cash and cash equivalents of $143.4 million compared with $81.4 million at the end of the prior quarter.

Long-term debt (net of current maturities) was $11.3 billion compared with $11.2 billion at the end of the prior quarter.

RSG generated $806.6 million of cash from operating activities in the reported quarter.  The adjusted free cash flow was $77.2 million.

In the December quarter of 2022, RSG returned $156.4 million of total cash to its shareholders ($156.4 million of dividends paid).

Currently, Republic Services carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dividend Declared

RSG announced that its board cleared a quarterly cash dividend of 49.5 cents per share. The dividend will be paid out on Apr 14, to its shareholders of record as of Apr 3.

2023 Guidance

RSG expects revenues in the range of $14.650-$14.800 billion. The Zacks Consensus Estimate is pegged below the guided range at $14.52 billion.

Adjusted diluted earnings per share is anticipated to be between $5.15 and $5.23. The Zacks Consensus Estimate is pegged below the guided range at $5.09 per share.

Adjusted EBITDA is projected to be in the range of $4.275-$4.325 billion.

Management expects adjusted free cash flow to be between $1.86 billion and $1.90 billion.

RSG expects to invest at least $500 million in acquisitions in 2023.

Earnings Snapshots

Robert Half International Inc. (RHI - Free Report) reported mixed fourth-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed.

Quarterly earnings of $1.37 per share beat the Zacks Consensus Estimate by 1.5% but declined 9.3% year over year. Revenues of $1.73 billion missed the Zacks Consensus Estimate by 0.6% and decreased 2.4% year over year.

Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected second-quarter fiscal 2023 results.

Adjusted earnings per share of $1.96 beat the Zacks Consensus Estimate by 0.5% and grew 19% from the year-ago fiscal quarter’s reading. Total revenues of $4.4 billion beat the Zacks Consensus Estimate by 0.3% and improved 9.1% from the year-ago fiscal quarter’s reading on a reported basis and 10% on an organic constant-currency basis.

Booz Allen Hamilton Holding Corp. (BAH - Free Report) reported impressive third-quarter fiscal 2023 results, with both earnings and revenues beating the respective Zacks Consensus Estimate. Quarterly adjusted earnings (excluding 84 cents from non-recurring items) per share of $1.07 beat the Zacks Consensus Estimate by 4.9% and increased 4.9% on a year-over-year basis.

Total revenues of $2.3 billion beat the Zacks Consensus Estimate by 4% and increased 12.1% on a year-over-year basis.
 

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