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Stericycle's (SRCL) Q1 Earnings Beat Estimates, Surge Y/Y

Stericycle, Inc. SRCL reported better-than-expected first-quarter 2023 results.

Quarterly EPS came in at 49 cents, beating the Zacks Consensus Estimate and our estimate by 14%, and increasing 53.1% year over year.

Revenues of $684.3 million surpassed the consensus mark by 1.9% and our estimate by 1.3%, and increased 3% year over year. Organic revenues increased 7.2% year over year.

Revenues by Service

Regulated Waste and Compliance Services revenues declined slightly year over year on a reported basis but increased 5% on an organic basis to $451.3 million. Secure Information Destruction revenues increased 10.1% year over year on a reported basis and 11.8% organically to $233 million.

Revenues by Geography

Revenues from North America were $573.4 million, up 5.5% year over year on a reported basis and 8.8% organically. International revenues of $110.9 million declined 8% year over year.

Profitability Performance

Adjusted EBITDA was $111.3 million, up 29% from the year-ago quarter’s figure. Adjusted EBITDA margin was 16.3%, up from 13% in the prior-year quarter.

Adjusted operating income in the quarter amounted to $84.7 million, up 43.6% from the year-ago quarter’s levels. The adjusted operating margin was 12.4%, up from 8.9% in the prior-year quarter.

Balance Sheet & Cash Flow

Stericycle exited the quarter with cash and cash equivalents of $60 million compared with $56 million at the end of the prior quarter. Long-term debt was $1.5 billion, flat with the prior quarter.

SRCL generated $49.5 million of net cash from operating activities while capex was $36.4 million in the quarter. Free cash flow came in at $13.1 million in the reported quarter.

2023 Outlook

The company expects adjusted EPS to be between $1.75 and $2.05. 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.

Recent Earnings Snapshots of Some Service Providers

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 estimate by 11.4%. EPS 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.

Equifax EFX also reported a beat on both counts in its first-quarter 2023 results.

EFX’s adjusted earnings came in at $1.43, beating the consensus mark 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% year over year.

ManpowerGroup MAN reported lower-than-expected first-quarter 2023 results.

MAN’s adjusted earnings of $1.61 per share lagged the consensus mark by 0.6% but matched our estimate. Revenues of $4.8 billion missed the consensus mark by 1.3% and our estimate by a slight margin. The top line decreased 7.6% year over year.

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ManpowerGroup Inc. (MAN) : Free Stock Analysis Report

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Stericycle, Inc. (SRCL) : Free Stock Analysis Report

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