Republic Services' (RSG) Q1 Earnings Surpass Estimates
Republic Services, Inc. RSG reported impressive first-quarter 2023 results, with both earnings and revenues surpassing the respective Zacks Consensus Estimate.
Adjusted earnings (excluding 3 cents from non-recurring items) per share of $1.24 outpaced the Zacks Consensus Estimate by 9.7% and our estimates by 8.8%, also improved 8.8% year over year.
Republic Services' average recycled commodity price per ton sold during the first quarter was $105. This represents an increase from the fourth-quarter 2022 figure of $17 per ton and a decrease of $96 per ton over the prior year.
Republic Services, Inc. Price, Consensus and EPS Surprise
Republic Services, Inc. price-consensus-eps-surprise-chart | Republic Services, Inc. Quote
Revenues
Quarterly revenues of $3.58 billion surpassed the Zacks Consensus Estimate by 4.9% and increased 20.6% year over year. The revenues beat our estimates by 5.8%. Total internal growth plunged 8.6%, while revenues from acquisition surged more than 100%.
Revenues from the Collection segment totaled $2.46 billion, up 12.9% year over year. Revenues (net) in the Transfer and Landfill segments amounted to $173.3 million and $392.6 million, rising 5.1% and 12.3%, respectively, year over year. The Environmental Solutions segment’s revenues (net) of $408.3 million surged more than 100% year over year.
The Other segment’s revenues of $148.5 million declined 17.2% year over year.
Operating Results
Adjusted EBITDA margin of 29% declined 140 basis points from the prior-year quarter’s levels.
Operating income was $644.1 million, up 14.9% from the year-ago quarter’s levels. The operating income margin declined to 18% from the year-ago quarter’s figure of 18.9%.
Total selling, general and administrative expenses were $379.2 million, up 23.2% from the year-ago quarter’s figure.
Balance Sheet and Cash Flow
Republic Services exited first-quarter 2023 with cash and cash equivalents of $132.2 million compared with $143.4 million at the end of the prior quarter.
Long-term debt (net of current maturities) was $11.5 billion compared with $11.3 billion at the end of the prior quarter.
RSG generated $687.7 million of cash from operating activities in the reported quarter. The adjusted free cash flow was $495.5 million. Capital expenditures in the reported quarter were $378.6 million.
In the quarter that ended Mar 31,2023, RSG returned $156.4 million of total cash to its shareholders ($156.4 million of dividends paid).
2023 Guidance
The company reaffirmed its 2023 outlook. RSG expects revenues in the range of $14.65-$14.8 billion. The Zacks Consensus Estimate is pegged below the midpoint ($14.73) of the guided range at $14.71 billion.
Adjusted diluted earnings per share are anticipated to be between $5.15 and $5.23. The Zacks Consensus Estimate is below the midpoint ($5.19) of the guided range at $5.18 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.
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
Equifax EFX reported better-than-expected first-quarter 2023 results. Adjusted earnings (excluding 52 cents from non-recurring items) came in at $1.43, beating the Zacks Consensus Estimate by 4.4% but declining 35.6% from the year-ago figure. Total revenues of $1.3 billion surpassed the consensus estimate by 1.5% but decreased 4.5% on a reported basis from the year-ago figure. The top line was down 3% on a local currency basis.
Omnicom OMC reported better-than-expected first-quarter 2023 results. OMC’s earnings of $1.56 per share beat the Zacks Consensus Estimate by 13% and our estimates by 11.4%. Earnings per share increased 12.2% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 2.3% and our estimate by 1.4%. The top line increased 1% year over year.
Fiserv FISV reported impressive first-quarter 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Adjusted earnings per share (excluding 69 cents from non-recurring items) of $1.58 increased 12.9% year over year, beating the consensus mark by 1.3%. Earnings beat our estimate by 2.6%. Adjusted revenues of $4.28 billion beat the Zacks Consensus Estimate by 3% and increased 9.5% year over year. Revenues surpassed our estimates by 4.65%.
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