Republic Services Inc (RSG) Reports Q3 2023 Earnings: Key Highlights
Reported Earnings Per Share (EPS) of $1.52 and Adjusted EPS of $1.54
Net Income Margin expanded by 100 Basis Points and Adjusted EBITDA Margin by 70 Basis Points
Generated Cash Flow from Operations of $2,719 Million and Adjusted Free Cash Flow of $1,827 Million
Invested over $900 Million in Value-Creating Acquisitions
Board Authorized $3 Billion For Share Repurchases
On October 26, 2023, Republic Services Inc (NYSE:RSG) released its earnings report for the third quarter of 2023. The company reported a net income of $480.2 million, or $1.52 per diluted share, compared to $416.9 million, or $1.32 per diluted share, for the same period in 2022. Adjusted net income for Q3 2023 was $488.3 million, or $1.54 per diluted share, versus $425.4 million, or $1.34 per diluted share, for the comparable 2022 period.
Financial Performance
Republic Services Inc (NYSE:RSG) reported a total revenue growth of 6.3 percent, including 4.6 percent organic growth and 1.7 percent growth from acquisitions. The company's third-quarter net income was $480.2 million, with a margin of 12.6 percent. The EPS for the third quarter was $1.52 per share, an increase of 15.2 percent over the prior year. Adjusted EBITDA for the third quarter was $1,145.7 million, with an adjusted EBITDA margin of 29.9 percent of revenue.
Investments and Shareholder Returns
The company invested $947.4 million in acquisitions, all in the recycling and solid waste business. It returned $670.6 million to shareholders, which included $201.1 million of share repurchases and $469.5 million of dividends paid. The Board of Directors also approved a $3 billion share repurchase authorization effective starting January 1, 2024, and extending through December 31, 2026.
Outlook
Republic Services Inc (NYSE:RSG) raised its full-year 2023 diluted earnings per share guidance to be in the range of $5.30 to $5.33 and adjusted diluted earnings per share to be in the range of $5.46 to $5.49. The increase is primarily due to a lower than expected tax rate.
Balance Sheet and Cash Flow
As of September 30, 2023, the company had cash and cash equivalents of $157.5 million. The company generated cash flow from operations of $2,719.3 million for the nine months ended September 30, 2023.
Company's Commentary
During the third quarter, we delivered strong results as we continue to execute on our strategy designed to profitably grow the business, said Jon Vander Ark, president and chief executive officer. Our revenue growth was broad-based, including healthy pricing, positive organic volume growth and above-average contribution from acquisitions, which resulted in adjusted EBITDA growth of nine percent and 70 basis points of margin expansion. The investments we are making in sustainability growth initiatives remain on track, with expected financial contribution beginning in 2024.
Explore the complete 8-K earnings release (here) from Republic Services Inc for further details.
This article first appeared on GuruFocus.
