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Republic Services, Inc. (RSG - Free Report) reported impressive third-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 $1.54 outpaced the consensus estimate by 9.2% and improved 14.9% year over year.
Quarterly revenues of $3.73 billion surpassed the consensus mark by 1.1% and increased 6.3% year over year. Total internal growth amounted to 4.6%, while revenues from acquisition increased 1.7%.
Republic Services, Inc. Price, Consensus and EPS Surprise
Revenues from Collection totaled $2.62 billion, up 7.8% year over year, beating our estimate of $2.57 billion. Revenues (net) in the Transfer and Landfill segments amounted to $206.2 million and $436.3 million, rising 8.9% and 5.8%, respectively, year over year. Transfer segment revenues beat our estimate by 6.7% and Landfill revenues beat our estimates by 3.1%. Environmental solutions’ revenues (net) of $404.8 million surged 1.9% year over year but missed our estimate of $424.5.
Other segment’s revenues of $162.1 million declined 5.9% year over year.
Operating Results
Adjusted EBITDA for the quarter was $1.14 billion, indicating a 15% increase from the year-ago levels and exceeding our estimate of $1.13 billion. Adjusted EBITDA margin of 29.7% was up from the prior-year quarter’s figure of 27.5%.
Operating income was $727.8 million, up 9.6% from the year-ago quarter’s levels. The operating income margin climbed to 19% from the year-ago quarter’s figure of 18.5%.
Balance Sheet and Cash Flow
Republic Services exited third-quarter 2023 with cash and cash equivalents of $157.5 million compared with $181.6 million at the end of the prior quarter.
Long-term debt (net of current maturities) was $10.99 billion compared with $11.96 billion at the end of the prior quarter.
RSG generated $953.1 million in cash from operating activities in the reported quarter. The adjusted free cash flow was $562.4 million. Capital expenditures in the reported quarter were $409.9 million.
The company paid $146.5 million as dividend during the third quarter and repurchased 1.4 million shares for $201.1 million.
2023 Guidance
The company raised its 2023 earnings per share (EPS) outlook. Adjusted EPS is anticipated to be between $5.46 and $5.49, up from the previous expectation of $5.33 to $5.38. The Zacks Consensus Estimate of EPS of $5.35 is pegged lower than the revised guided range. Adjusted EBITDA is projected to be in the range of $4.34-$4.36 billion.
RSG expects revenues to be in the range of $14.775-$14.85 billion. The consensus estimate is pegged higher than the midpoint ($14.73) of the guided range of $14.84 billion.
Management expects adjusted free cash flow to be between $1.9 billion and $1.925 billion.
Automatic Data Processing, Inc. (ADP - Free Report) reported mixed first-quarter fiscal 2024 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. ADP’s adjusted EPS of $2.08 beat the consensus estimate by 2.5% and grew 11.8% from the year-ago fiscal quarter’s figure. Total revenues of $4.51 billion missed the consensus estimate by 0.2% but improved 7% from the year-ago fiscal quarter’s reading on a reported basis and 7% on an organic constant-currency basis.
Equifax Inc.(EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Equifax’s adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1% but increasing 1.7% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.7% and increased 6% from the year-ago figure on a reported basis and 6.5% on a local-currency basis.
Fiserv, Inc.(FI - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. FI’s adjusted EPS (excluding 40 cents from non-recurring items) of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and increased 8.2% year over year. Organic revenue growth was 12% in the quarter, driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
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Republic Services' (RSG) Q3 Earnings Surpass Estimates
Republic Services, Inc. (RSG - Free Report) reported impressive third-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 $1.54 outpaced the consensus estimate by 9.2% and improved 14.9% year over year.
Quarterly revenues of $3.73 billion surpassed the consensus mark by 1.1% and increased 6.3% year over year. Total internal growth amounted to 4.6%, while revenues from acquisition increased 1.7%.
Republic Services, Inc. Price, Consensus and EPS Surprise
Republic Services, Inc. price-consensus-eps-surprise-chart | Republic Services, Inc. Quote
Segmental Revenues
Revenues from Collection totaled $2.62 billion, up 7.8% year over year, beating our estimate of $2.57 billion. Revenues (net) in the Transfer and Landfill segments amounted to $206.2 million and $436.3 million, rising 8.9% and 5.8%, respectively, year over year. Transfer segment revenues beat our estimate by 6.7% and Landfill revenues beat our estimates by 3.1%. Environmental solutions’ revenues (net) of $404.8 million surged 1.9% year over year but missed our estimate of $424.5.
Other segment’s revenues of $162.1 million declined 5.9% year over year.
Operating Results
Adjusted EBITDA for the quarter was $1.14 billion, indicating a 15% increase from the year-ago levels and exceeding our estimate of $1.13 billion. Adjusted EBITDA margin of 29.7% was up from the prior-year quarter’s figure of 27.5%.
Operating income was $727.8 million, up 9.6% from the year-ago quarter’s levels. The operating income margin climbed to 19% from the year-ago quarter’s figure of 18.5%.
Balance Sheet and Cash Flow
Republic Services exited third-quarter 2023 with cash and cash equivalents of $157.5 million compared with $181.6 million at the end of the prior quarter.
Long-term debt (net of current maturities) was $10.99 billion compared with $11.96 billion at the end of the prior quarter.
RSG generated $953.1 million in cash from operating activities in the reported quarter. The adjusted free cash flow was $562.4 million. Capital expenditures in the reported quarter were $409.9 million.
The company paid $146.5 million as dividend during the third quarter and repurchased 1.4 million shares for $201.1 million.
2023 Guidance
The company raised its 2023 earnings per share (EPS) outlook. Adjusted EPS is anticipated to be between $5.46 and $5.49, up from the previous expectation of $5.33 to $5.38. The Zacks Consensus Estimate of EPS of $5.35 is pegged lower than the revised guided range. Adjusted EBITDA is projected to be in the range of $4.34-$4.36 billion.
RSG expects revenues to be in the range of $14.775-$14.85 billion. The consensus estimate is pegged higher than the midpoint ($14.73) of the guided range of $14.84 billion.
Management expects adjusted free cash flow to be between $1.9 billion and $1.925 billion.
Currently, Republic Services carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Automatic Data Processing, Inc. (ADP - Free Report) reported mixed first-quarter fiscal 2024 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. ADP’s adjusted EPS of $2.08 beat the consensus estimate by 2.5% and grew 11.8% from the year-ago fiscal quarter’s figure. Total revenues of $4.51 billion missed the consensus estimate by 0.2% but improved 7% from the year-ago fiscal quarter’s reading on a reported basis and 7% on an organic constant-currency basis.
Equifax Inc.(EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Equifax’s adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1% but increasing 1.7% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.7% and increased 6% from the year-ago figure on a reported basis and 6.5% on a local-currency basis.
Fiserv, Inc.(FI - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
FI’s adjusted EPS (excluding 40 cents from non-recurring items) of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and increased 8.2% year over year.
Organic revenue growth was 12% in the quarter, driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.