Shares of Cintas rise after 1Q beats expectations

Cintas shares rise after 1Q profit beats views; analyst says co. management upbeat on margins

• On 2:36 pm EDT, Thursday September 24, 2009

HARTFORD, Conn. (AP) -- Shares of Cintas Corp. rose Thursday, a day after the corporate uniform supplier said its fiscal first quarter profit fell 31 percent, while still beating Wall Street's prediction.

"Importantly, key metrics on the core rentals unit are improving and management seemed upbeat on future margin progress," Citi Investment Research analyst Ashwin Shirvaikar said in a client note.

Still, Barclays analyst Gary E. Bisbee said in a client note that he remains cautious on "prospects for Cintas shares over the next year as we believe they are fully priced and expect a challenging fiscal 2010 and slow revenue and profit recovery." He added that it's unlikely progress can be sustained without a return to employment growth.

Cintas said Wednesday net income for the three months ended Aug. 31 was $54 million, or 35 cents per share, compared with $78.6 million, or 51 cents per share, in the prior-year period.

Excluding charges, Cintas said it earned 43 cents per share.

According to Thomson Reuters, analysts expected a profit of 39 cents per share.

Shares rose $1.38, or 4.9 percent, to $29.73 per share in afternoon trading.