Stericycle (SRCL) Gains 3.3% Despite Missing Q2 Estimates
Stericycle, Inc. SRCL missed earnings and revenue estimates in second-quarter 2023 results.
Quarterly earnings per share (EPS) came in at 43 cents (adjusting 97 cents from non-recurring items), missing the Zacks Consensus Estimate by 12.2% and decreasing 10.4% year over year.
Revenues of $669.5 million missed the consensus mark by 2.1% and declined 1.5% year over year. Organic revenues increased 2.3% year over year.
The stock gained 3.3% since the earning release despite the disappointing results.
Revenues by Service
Regulated Waste and Compliance Services’ revenues declined 3.7% year over year on a reported basis but increased 4.7% on an organic basis to $444.7 million, higher than our estimated $430.6 million. Secure Information Destruction’s revenues decreased 2.9% year over year on a reported basis and 2.1% organically to $224.8 million
Stericycle, Inc. Price, Consensus and EPS Surprise
Stericycle, Inc. price-consensus-eps-surprise-chart | Stericycle, Inc. Quote
Revenues by Geography
Revenues from North America were $565.2 million, slightly below the year-ago figure on a reported basis. The figure increased 2.4% organically. International revenues of $104.3 million declined 6.2% year over year, lower than our estimate of $107.1 million.
Profitability Performance
Adjusted EBITDA was $102 million, down 6.9% from the year-ago quarter’s figure and missed our estimate by 6.3%. Adjusted EBITDA margin was 15.2%, down from 16% as per our estimated value and prior-year quarter reported figure.
Adjusted operating income in the quarter amounted to $76 million, down 7.3% from the year-ago quarter’s levels and our estimate of $78.5 million. The adjusted operating margin was 11.4%, down from 12.1% in the prior-year quarter and our estimated 11.5%.
Balance Sheet & Cash Flow
Stericycle exited the quarter with cash and cash equivalents of $30.7 million, compared with $60 million at the end of the prior quarter. Long-term debt was $1.29 billion, down from $1.5 billion reported at the prior quarter end.
SRCL generated $105.4 million in net cash from operating activities while capex was $52.5 million in the quarter. Free cash flow came in at $78.1 million.
2023 Outlook Reaffirmed
The company expects adjusted EPS to be between $1.75 and $2.05. The midpoint ($1.90) is slightly above the Zacks Consensus Estimate of $1.89. The company expects 3-5% revenue growth organically. It expects free cash flow to be between $175 million and $205 million. It anticipates capital expenditures between $125 million and $145 million.
Earnings Snapshot of Some Other Players
Gartner IT reported better-than-expected second-quarter 2023 results. Adjusted EPS (excluding 37 cents from non-recurring items) of $2.85 beat the Zacks Consensus Estimate by 14.9% but matched the year-ago reported figure. Revenues of $1.5 billion beat the consensus estimate by 1% and improved 9.2% year over year on a reported basis and 10% on a foreign-currency-neutral basis. Total contract value was $4.6 billion, up 8.9% year over year on a foreign-currency-neutral basis.
Automatic Data ADP reported better-than-expected fourth-quarter fiscal 2023 results. Adjusted EPS 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 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
Stericycle, Inc. (SRCL) : Free Stock Analysis Report
Gartner, Inc. (IT) : Free Stock Analysis Report
TransUnion (TRU) : Free Stock Analysis Report
