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Republic Services, Inc. (RSG - Free Report) reported impressive second-quarter 2023 results, with both earnings and revenues surpassing the respective Zacks Consensus Estimate.
Adjusted earnings (excluding 6 cents from non-recurring items) per share of $1.41 outpaced the consensus estimate by 6% and improved 6.8% year over year.
Republic Services, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $3.73 billion surpassed the consensus mark by a slight margin and increased 9.2% year over year. Total internal growth plunged to 4.7% while revenues from acquisition increased 4.4%.
Segmental Revenues
Revenues from the Collection segment totaled $2.54 billion, up 9% year over year. The figure beat our estimates of $2.48 billion. Revenues (net) in the Transfer and Landfill segments amounted to $197.3 million and $431 million, rising 2.9% and 6.1%, respectively, year over year. Landfill’s revenues beat our estimates by 5%. Environmental solutions’ revenues (net) of $398.3 million surged 35.3% year over year and beat our estimate by 2.2%.
The Other segment’s revenues of $156.3 million declined 18.2% year over year.
Operating Results
Adjusted EBITDA margin of 30% increased 40 basis points from the prior-year quarter’s levels. Adjusted EBITDA for the quarter came in at $1.12 billion, indicating a 10.9% increase from the year ago-levels. The figure exceeded our estimate by 9.8%.
Operating income was $707.2 million, up 19.9% from the year-ago quarter’s levels. The operating income margin came in at 19% from the year-ago quarter’s figure of 17.3%.
Balance Sheet and Cash Flow
Republic Services exited second-quarter 2023 with cash and cash equivalents of $181.6 million, compared with $132.2 million at the end of the prior quarter.
Long-term debt (net of current maturities) was $11.96 billion, compared with $11.5 billion at the end of the prior quarter.
RSG generated $1078.5 million in cash from operating activities in the reported quarter. The adjusted free cash flow was $769.2 million. Capital expenditures in the reported quarter were $171.6 million.
2023 Guidance
The company raised its 2023 outlook. RSG expects revenues in the range of $14.775-$14.85 billion. The Zacks Consensus Estimate is pegged higher than the guided range at $14.86 billion.
Adjusted diluted earnings per share is anticipated to be between $5.33 and $5.38. The consensus estimate of adjusted earnings is below the midpoint ($5.36) of the guided range at $5.25 per share.
Adjusted EBITDA is projected to be in the range of $4.34-$4.36 billion.
Management expects adjusted free cash flow to be between $1.9 billion and $1.925 billion.
Automatic Data (ADP - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results. Adjusted earnings per share of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago fiscal quarter’s figure. Total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago fiscal quarter’s reading on a reported basis and 9% on an organic constant-currency basis.
TransUnion (TRU - Free Report) reported impressive second-quarter 2023 results wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings of 86 cents per share (adjusting 58 cents from non-recurring items) surpassed the consensus mark by 3.6% but decreased 12.2% year over year. Total revenues of $968 million beat the consensus mark by 1% and increased 2.1% year over year on a reported basis. Revenues were up 3% on a constant-currency basis, mainly driven by strength in international markets.
Equifax (EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings (excluding 59 cents from non-recurring items) came in at $1.71 per share, beating the consensus mark by 2.4% but declining 18.2% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.4% while matching the year-ago figure on a reported basis. The top line gained 1% on a local-currency basis.
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Republic Services (RSG) Q2 Earnings & Revenues Beat Estimates
Republic Services, Inc. (RSG - Free Report) reported impressive second-quarter 2023 results, with both earnings and revenues surpassing the respective Zacks Consensus Estimate.
Adjusted earnings (excluding 6 cents from non-recurring items) per share of $1.41 outpaced the consensus estimate by 6% and improved 6.8% year over year.
Republic Services, Inc. Price, Consensus and EPS Surprise
Republic Services, Inc. price-consensus-eps-surprise-chart | Republic Services, Inc. Quote
Quarterly revenues of $3.73 billion surpassed the consensus mark by a slight margin and increased 9.2% year over year. Total internal growth plunged to 4.7% while revenues from acquisition increased 4.4%.
Segmental Revenues
Revenues from the Collection segment totaled $2.54 billion, up 9% year over year. The figure beat our estimates of $2.48 billion. Revenues (net) in the Transfer and Landfill segments amounted to $197.3 million and $431 million, rising 2.9% and 6.1%, respectively, year over year. Landfill’s revenues beat our estimates by 5%. Environmental solutions’ revenues (net) of $398.3 million surged 35.3% year over year and beat our estimate by 2.2%.
The Other segment’s revenues of $156.3 million declined 18.2% year over year.
Operating Results
Adjusted EBITDA margin of 30% increased 40 basis points from the prior-year quarter’s levels. Adjusted EBITDA for the quarter came in at $1.12 billion, indicating a 10.9% increase from the year ago-levels. The figure exceeded our estimate by 9.8%.
Operating income was $707.2 million, up 19.9% from the year-ago quarter’s levels. The operating income margin came in at 19% from the year-ago quarter’s figure of 17.3%.
Balance Sheet and Cash Flow
Republic Services exited second-quarter 2023 with cash and cash equivalents of $181.6 million, compared with $132.2 million at the end of the prior quarter.
Long-term debt (net of current maturities) was $11.96 billion, compared with $11.5 billion at the end of the prior quarter.
RSG generated $1078.5 million in cash from operating activities in the reported quarter. The adjusted free cash flow was $769.2 million. Capital expenditures in the reported quarter were $171.6 million.
2023 Guidance
The company raised its 2023 outlook. RSG expects revenues in the range of $14.775-$14.85 billion. The Zacks Consensus Estimate is pegged higher than the guided range at $14.86 billion.
Adjusted diluted earnings per share is anticipated to be between $5.33 and $5.38. The consensus estimate of adjusted earnings is below the midpoint ($5.36) of the guided range at $5.25 per share.
Adjusted EBITDA is projected to be in the range of $4.34-$4.36 billion.
Management expects adjusted free cash flow to be between $1.9 billion and $1.925 billion.
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.
Earnings Snapshot
Automatic Data (ADP - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results. Adjusted earnings per share of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago fiscal quarter’s figure. Total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago fiscal quarter’s reading on a reported basis and 9% on an organic constant-currency basis.
TransUnion (TRU - Free Report) reported impressive second-quarter 2023 results wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings of 86 cents per share (adjusting 58 cents from non-recurring items) surpassed the consensus mark by 3.6% but decreased 12.2% year over year. Total revenues of $968 million beat the consensus mark by 1% and increased 2.1% year over year on a reported basis. Revenues were up 3% on a constant-currency basis, mainly driven by strength in international markets.
Equifax (EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings (excluding 59 cents from non-recurring items) came in at $1.71 per share, beating the consensus mark by 2.4% but declining 18.2% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.4% while matching the year-ago figure on a reported basis. The top line gained 1% on a local-currency basis.